Legal structures: the basics

Introduction

To put your business on a proper footing with HM Revenue & Customs (HMRC) and other authorities, you need to make sure that it has the right legal structure. It's worth thinking carefully about which structure best suits the way that you do business, as this will affect:

• the tax and National Insurance that you pay
• the records and accounts that you have to keep
• your financial liability if the business runs into trouble
• the ways your business can raise money
• the way management decisions are made about the business

There are several structures to choose from, depending on your situation. This guide will help you understand the differences between them.

If you are not sure which legal structure would best suit your business, it's a good idea to get advice from an accountant or solicitor.

Subjects covered in this guide

• Introduction
• Self-employment
• Sole trader
• Partnership
• Limited liability partnership (LLP)
• Limited liability companies
• Franchises
• Social enterprises
• Overview of legal structures
• Here's how I chose the right legal structure for my business

Print options - What are my print options - Opens in a new window

• Add guide to my print portfolio (print later as PDF)

Email options - What are my email options - Opens in a new window

• Tell a friend about this page
• Send me an email alert when this guide changes