Structure For New Business Setup in Glasgow or the rest of the UK?

You have a number of structural options to consider when you start a new business in Glasgow or the rest of the UK. Each option comes with different tax and legal considerations so it is definitely worth giving this matter careful thought. If you are starting a business and you are unsure about the implications of its structure, consult a firm or accountants so you can be sure you are journeying down the right route.

Here is a quick guide to the different structures you can choose from.

Sole Trader

This is definitely the simplest way to set up in business. You do not have to abide by any formalities in the first instance, aside from informing HMRC that you are now operating as a sole trader. You must fill out a tax return each year and you are responsible for paying tax on any profits, although all the profits you make are yours. It is worth considering that there is no distinction between business and personal affairs so if you run up debts you will need to pay them off using your own means.

Partnership

A set of sole traders come together in a partnership and agree to divide profits jointly. Ask one of the firms of accountants glasgow offers for advice on setting up a partnership as you should draw up a partnership agreement. If debts are accrued these are payable by all the partners, shared out, and as such if one partner cannot pay the others will have to find the money to do so.

Limited Company

When you set up a limited company it is different from your personal affairs. You own shares in your company and it trades in its own right. You are therefore both an owner and an employee of the company. You need to balance your ownership and employment in order to maintain the right combination of overall tax liability as well as national insurance contributions. Again, a firm of accountants in Glasgow can help you set up a limited company and advise on the steps you need to take to run it effectively.

Limited Liability Partnership

This partnership has a similar legal structure to a company but there are exceptions in the way tax is administered. An LLP is usually set up by a medium or large partnership group.

Co-operative

This is a type of mutual organisation that is jointly owned by the employees of the organisation. A co-operative works differently to the other business structures in terms of tax and liabilities, and therefore it is advisable to get specialist advice if you are considering setting up a co-operative business.