Different Types of Companies in the UK
Ever wonder what are the main types of businesses / companies in the UK !
There are different types of businesses that depend on your project and you will need to know which is the most suitable.
This is the easiest way to set up your business in the UK and therefore there are very few formalities between which to inform the HMRC of the start of your activity and declare at the end of every year your profits so you can pay your taxes. On the same model as the micro-enterprise in France , all the profits become immediately property of the natural person. On the other hand, it operates as an unlimited risk company and the sole trader is therefore bound by the debt obligation.
This is a variation of the sole trader , in which two or more people combine their talents and networks to create a more profitable business than they could do individually. Each party will receive a percentage of the profits and it is therefore recommended to establish a written contract specifying how the partners will work. Each of the parties will pay its taxes in proportion to the percentage of profits that it has received. In addition, each is responsible for the debts of the company.
Limited Company :
The limited liability company is a mercantile company, that is to say, that its social objective is the realization of an activity subject to commercial law. It is formed by a limited number of partners whose capital is equitably distributed within the company. The main advantage is that the debts are specific to the company and do not affect the shareholders . When the company creates profit, it can be converted into a dividend for shareholders or as a salary for employees. It can therefore be optimized to reduce the taxes owed by the company.
Limited Liability Partnership :
Similar to the Limited Company , it is managed the same way. The only difference is in the taxes for which a partnership is considered. As a result, the company is a limited liability company with administrative obligations but does not have the flexibility of National Insurance . It is intended for medium and large companies or in very specific cases.