Business Structure

Question 1

Sole trader

Answer 1

no separate relationship between individual and business

• least amount of protection to business owner in terms of liabilities
• can have employees and taxed under PAYE
• full liability to debts
• income tax and CGT on profits
• NIC class 2 and 4

Question 2

Partnership

Answer 2

only ay tax on their share of the partnership profits and not help liable for tax liabilities of partners

Question 3

Limited liability partnerships

Answer 3

partners of LLP are not individual liable for LLP debts

• no corporation tax
• NIC 2 and 4

Question 4

Limited Company

Answer 4

all forms of profits including capital gains subject to corporation tax and directors are employees

• owners pay salary or dividends or combination and taxed accordingly
• company responsible for own debts
• cannot trade until registered, details made public on company house and must provide yearly accounts
• do not pay income tax and CGT

Question 5

Public Limited Company (PLC)

Answer 5

larger usually floated on stock exhange

- much have 2 directors, new shareholders must state public and must end their name with PLC