UK Business Structure Advice
Identifying the correct UK Business Structures is a vital part of a business start-up. At HM Accountants we help individuals to start up their own business venture and we offer the best advice and support needed to benefit your company’s needs. The team at HM Accountants will help you decide whether you want to work as a sole trader, partnership or set up your own limited company.
Limited Company
The most common form of business structure for small businesses is a limited liability company; it is incorporated and limited by shares. This means that the company has shareholders and the liability of the shareholders to creditors of the company is limited to any money they originally invested.
Advantages
- Minimising personal liability – All your company’s personal assets will be secure.
- Credibility and Trust – The professional status of a limited company structure will add valuable respect and credibility to your business and will allow you to expand your brand image and reputation.
- Tax efficiency and planning.
Disadvantages
- Associated costs – The start-up costs for a limited company is much expensive than a Partnership and Sole Trader, as you may have to pay additional fees.
- Accounting requirements are more complex and time-consuming.
- Annual accounts and financial reports must be placed in public domain
Sole Trader
A Sole Trader is a self-employed individual who works for themselves. As a Sole Trader, you must register your business with HMRC and you have to also file out a Self-Assessment Tax Return.
Advantages
- Low cost, easy to set-up – Although you still need to register your business, the costs of maintaining a Sole Trader is much less than other business structures.
- Very little financial reporting.
- Total control of the business – As the sole owner of your business, you have full control of business decisions and spending habits.
Disadvantages
- Full liability for the debt – You are personally responsible for all business debts and company actions under this business structure.
- As you are not required to keep financial statements, there is a lack of structure.
Partnerships
A Partnership consists of two or more individuals that agree to share their profits.
Advantages
- Easy to establish – Compared to other business structures, partnerships require minimal paperwork and legal documents to establish.
- Distributed workload – Partnership consists of two or more individuals, therefore you can distribute the work equally and help meet the company’s targets.
- Partners can combine their knowledge.
Disadvantages
- Disagreements may occur.
- Full liability – All members in a Partnership company are liable for business-related debts.
By choosing us to be your appointed accountant will allow your business to expand and grow. The great resource of advice and wisdom given by our expert team will help you to manage your accounts and expenditure efficiently and accurately. As well as this, we will help keep your business organised, as we understand how frustrating it may be for you as an employer to focus on different sectors at the same time, such as operations, finance, and customer service. We would like to build long-lasting relationships with our clients and new businesses and therefore we aim to go the extra mile to help meet your expectations and targets.
Appointing us to be your accountants, will ensure your finance is managed accurately so that your company is run in a cost-effective way and this will allow you as an employer to focus on the key areas of the business, such as customer service. Poorly structured organisations can negatively impact a company’s brand image and reputation, as critical deadlines will not be met due to insufficient human resources in each department. Hence, it is important you have an appointed accountant who can assist and advise you on what business structure is suitable for your specific business.
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