Business Start Up
If you are thinking of starting your own business, it is important that you use an appropriate business structure. This is extremely important as the structure you use, will determine your tax and legal responsibilities. At J S White & Co Limited, we can help you to decide an appropriate business structure that takes into account your personal situation and your plans for your business going forward.
Your trading options include:
This is the most straight forward method of trading. Within this you are required to keep business records that allow you to calculate your profits. This will then determine what tax and national insurance contributions are due to the HMRC. It is important to note that the business of a sole trader is not treated as separate from their personal affairs. Therefore you are personally liable for any debts accumulated by your business.
A partnership is a similar way of trading that involves 2 or more people trading together. This gives them the opportunity to merge their talents and contacts for greater business outcomes. All profits are shared between the partners in a pre-arranged percentage. Similarly, to sole traders, partners are liable for any debts accumulated by the business. More importantly, each partner is jointly liable for these debts. Therefore, if one partner fails to pay their share, the debt will fall onto the other partners.
A limited company differs from the structures above, as its liabilities and assets are deemed a separate entity from the person. If you operate as a limited company you are both the owner and employee of that company. This business structure can be advantageous as with correct tax planning you may be able to minimise your tax and national insurance contributions. There are however, additional administrative obligations that come with the use of this structure, including company secretarial submissions and PAYE requirements.
How can we help?
If you are considering setting up a new business, we can help to advise you on the most appropriate business structure for you. To do this we will consider a number of factors including ownership, liability and the tax implications of your choice.