Choose a legal structure for your business

1. Overview

You must choose a structure for your business. This structure will define your legal responsibilities, like:

• the paperwork you must fill in to get started
• the taxes you’ll have to manage and pay
• how you can personally take the profit your business makes
• your personal responsibilities if your business makes a loss

You can change your business structure after you’ve started up if you find a new structure suits you better.

Types of business

The main types are:

• sole trader
• limited company
• business partnership

You can form an ‘unincorporated association’ if you’re setting up a small organisation like a sports club or a voluntary group and don’t plan to make a profit.

You can use other structures for businesses that help people or communities, eg ‘social enterprises’.

Print entire guide

Last updated: 30 June 2016