When a new business is established, whether as a start-up or a new enterprise by an existing business, a decision has to be made on what legal structure the business will have. The main choices are:
Sole trader - Low cost, easy to set up, full control retained and very little financial reporting.
Partnership - The above, but with more heads and more potential to raise finance.
Limited company - Less personal financial exposure, favourable tax regime and ability to work for corporate clients.
Limited liability partnership (LLP) – Flexibility can be incorporated in members’ agreement and advantages of limited company and partnership combined.
Each of these formations have advantages and disadvantages, largely in terms of the tax treatment and general liabilities of the business and its owners, and the cost of administration.
Once a business structure has been chosen, there are numerous other requirements which a new business will have to address, including:
Agreements between the members of the business, such as partnership agreements, LLP agreements, shareholders agreements and Articles of Association
Terms and conditions of business.
The on-going administrative duties of companies and LLPs.
Our team has extensive experience in assisting new businesses and can offer advice on the best structure to use in the particular circumstances. We can also help with the formalities of setting up companies and LLPs and with partnership, LLP and shareholders agreements.