5.2 What structure do I need?
Before making your mind up about the kind of legal structure you need, you will find it useful to do some research of your own. The questions below might help you to narrow down the options for further discussion with a professional adviser, and the GOV.UK website is another useful place to start. Answer these questions to help you complete Activity 2.
- Are you planning on starting the business on your own or with one or more others? What would you want to happen in future in the event of one or other wanting to leave, for example retiring or moving away?
- Are you taking over a business from someone else? What is the structure of that business, who owns it and what further involvement might they want in it, if any?
- How much administration is needed? Although you will always need to keep adequate records for tax and other reasons, some structures do not require you to register your company, incorporate it, file accounts or have them audited, or to make annual returns.
- How much finance do you need? Where will your finance come from? What assets do you have and are prepared to use as a collateral if necessary to borrow capital to invest in your business? Will it come from you or from loans and shareholders? How does having shareholders impact on your growth plan?
- Do you need to consider tax advantages or protection of personal assets?
- What about other considerations like your community, surroundings or the environment?
Activity 2 Deciding on the structure of your business
Using your answers to the questions above as a prompt, look up the types of structure that exist to see how they would fit for you. Complete the table below.
Table 1 Finding what business structure works for you
|Structure||How would this work for me?||What wouldn’t work for me|
|Limited liability partnership|
It is impossible to give general feedback here about you, your circumstances or your idea without knowing what they are. However, you will get a lot more from a discussion with a legal adviser having done some preparatory thinking and being clear about what is important to you based on all the points made above about your goals, future ambitions, the lifestyle you are seeking and whether or how you want to grow your enterprise.
Next you will think about what else you should consider once you have started your business.