Companies

The following table considers:

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A sole trader is the simplest business structure. The business has no separate legal existence from its owner. It is owned and run by one individual who is responsible for all debts and liabilities of the business. Sole traders may trade under their own name or register a business name at ...

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A partnership is a relationship between two or more entities carrying on a business to make a profit. A minimum of two partners is required to form a partnership under s 1 of the Partnership Act 1890. There is a statutory maximum of 20 partners, but there are many permitted exceptions, ...

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Private limited companies There are two different kinds of private limited companies; those where liability is limited by shares, and those where liability is limited by guarantee.

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A joint venture is not a separate legal entity but an agreement to act in concert for a particular purpose. It is a commercial relationship between two or more entities for a particular undertaking to realise mutual commercial gain. The parties forming a joint venture might each have unique ...

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Associations Associations are not normally considered business structures as they serve to protect a committee and members of a group, usually conducting an activity that will not generate a profit.

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Income tax is payable on the taxable income of an individual member of a legal structure depending on the type of structure and how the income is taken. The first payment for a new business is made in arears. For a tax year ending 5 April, a self-assessment tax return must be filed by the following ...

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Capital gains tax is applied to any profits made arising from the disposal of an item, for example, by selling, swapping, or giving it away. The gain is taxed, not the amount of money received. Disposals chargeable to capital gains tax include personal possessions except vehicles, additional ...

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Sole traders purchasing residential property are treated as individuals, and the same rates and reliefs apply. Partnerships own property in the individual names of the partners, and the individual rates and reliefs apply.

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Limited companies pay corporation tax on trading profits, investments, and chargeable gains from selling assets such as land and property, equipment, machinery, or shares. All profits are taxable. There is one rate of tax appliable no matter the profit or gains made. This rate is lower than the ...

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A sole trader is liable to the full extent of their personal and business assets. In a partnership, the partners are liable for debts of the partnership, including being liable for debts incurred by a partner without the knowledge or authority of the other partners.

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Most clients seek to minimise their tax liability, protect their assets, and retain full control of their affairs. A sole trader has full control but as seen above is taxed on all income and capital gains and is fully exposed to creditors. Succession can be by way of sale or gifting the assets and ...

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The set-up costs for a sole trader are minimal and this structure also has the lowest running costs. In addition, the principal is not an employee of the business and therefore compulsory employee pension contributions, PAYE and employment rights do not apply. The drafting and signing of ...

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Many clients believe they have protected a trading name by registering a company name, business name, or domain name. This is not the case. A business name is merely a name under which a business operates. Companies must register with Companies House, and all who pay self-assessed tax must register ...

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Although tax advice often forms part of the general advice given to a client, practitioners need to bear in mind the following:

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