Choosing a legal structure for your business

Overview

You must choose a structure for your business. This structure will define your legal responsibilities, like:

  • The paperwork you must fill in to get started
  • The taxes you’ll have to manage and pay
  • How you can personally take the profit your business makes
  • Your personal responsibilities if your business makes a loss
  • You can change your business structure after you’ve started up if you find a new structure suits you better.
Types of business

The main types are:

  • Sole trader
  • Limited company
  • Business partnership
  • You can form an ‘unincorporated association’ if you’re setting up a small organisation like a sports club or a voluntary group and don’t plan to make a profit.
  • You can use other structures for businesses that help people or communities, e.g. ‘social enterprises’.