Sole traderExclusive owner of the business, entitled to keep all profits but liable for all losses·Low cost, easy to set-up·Control retained·Very little financial reporting or business administration·Full liability for debt·Personal tax liabilities on profits which can be less efficient
PartnershipBetween two or more individuals who share management and profits·As above, but with more owners·More potential to raise finance·As above but affecting all partners jointly and severally.·Governed by very old law unless a Partnership Agreement is created.·Can be messy to wind up
Limited companyPrivate company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested·Less personal financial exposure·Favourable tax regime·Conduct of the business conducted in accordance with constitution – Articles of Association. Central rule book so-to-speak!·Administrative and regulatory demands heavier·Annual accounts and financial reports must be placed in public domain
Limited liability partnership (LLP)Some or all partners have limited liabilities, and exhibits elements of partnerships and corporations·Flexibility: can be incorporated in members’ agreement·Advantages of limited company and partnership combined·Profit taxed as income·Partners must disclose income·LLP must start to trade within a year of registration – or be struck off