If you have got a great business idea, did your market research along with an appropriate business plan, and you are thinking of setting up a company in the UK, then you need to know the different business that the UK government provides.
For company incorporation in the UK You can choose your appropriate business from the below-mentioned list:
1. Sole trader:
In a sole-trader type of business, the owner is considered self-employed, which means that you need to register your company with HMRC for self-assessment after you begin trading. The sole trader should meet the legal requirements while running the business. In addition, a sole-trader needs to keep its profits after tax and the person is also responsible for any kind of business debts. If you own a sole trading business, then you need to pay income tax and National Insurance that is subject to thresholds for the profit that is generated from your business.
For UK company formation under this type of business structure, you and your partners need to share the responsibility of your business personally. The partners should share their own revenues and each of them should pay tax on their share. While setting up a business partnership you must choose a name, a nominated partner, and register your company with HMRC. The 'nominated partner' will manage the partnership's tax returns and record keeping.
3. Limited liability partnership (LLP):
In this LLP business structure, the number of partners is not limited, but there needs to be a minimum of two designated members for filing annual accounts. Like a limited company the LLP structure gives protection to member’s assets and that protection is limited as much the members have invested in the business and any personal guarantees they may have provided when raising loans.
4. Limited liability company (Ltd):
A private company has the limited liability of shareholders to creditors. In this type of business structure, the personal assets of the shareholders are protected in the event of company bankruptcy, but the amount invested in the business can be lost. An ltd company must have a minimum of one director and one guarantor. Moreover, the company director of this type of company structure operates the company on behalf of the shareholders. An application fee should be paid by a limited company during incorporating with Companies House.
5. Unlimited company (Unltd):
For registering a company in the UK under unlimited company the shareholders of your company must be responsible for settling the business's financial liabilities, regardless of how much they have invested in the company. The main difference between the limited and unlimited companies is that they do not have any restrictions on the sum of money, which the shareholders need to pay if the business goes off officially.
6. Community interest company:
Companies that fall under this type of business structure are not driven by the objective of earning a maximum profit for their shareholders, instead, they will utilise their profits and assets for the betterment of the communities that they are in.