In the UK, businesses can operate under several legal structures, each with different implications for liability, taxation, and management. The main types include:
Sole Trader – The simplest form, where an individual owns and runs the business, with unlimited personal liability.
- Partnership – Two or more individuals share ownership, responsibilities, and liabilities.
- Limited Liability Partnership (LLP) – Partners have limited liability, offering protection from personal financial risk.
- Private Limited Company (Ltd) – A separate legal entity, limiting shareholders' liability to their investment.
- Public Limited Company (PLC) – Can sell shares to the public, offering expanded access to capital.