Business Structures and Attributes Flashcards
Sole Trader: Formation
No formalities required
Owner simply operates the business
Sole Trader: Liability
Unlimited personal liability
Sole Trader: Management
Managed directly by sole trader
Sole Trader: Transferability
Sole trader can sell the business at will
Sole Trader: Tax
Sole trader pays income tax
Sole Trader: Recordkeeping
No legal requirements to keep records or publish accounts
Sole Trader: Raising Finance
Cannot create a floating charge
General Partnership: Formation
Can be created by verbal or written agreement, or by conduct.
(1) Two or more persons
(2) Carrying on a business in common
(3) With the intention to make profit
General Partnership: Liability
Unlimited personal liability, joint and severally
General Partnership: Management
Run by the partners, but a managing partner can be appointed
General Partnership: Transferability
Requires unanimous consent
General Partnership: Tax
Partner pays income tax
General Partnership: Recordkeeping
No legal requirements to keep records or publish accounts
General Partnership: Raising Finance
Cannot create floating charge
Limited Partnership: Formation
(1) File relevant documents at Companies House
(2) Receive Certificate of Registration
Limited Partnership: Liability of Owners
General Partner: Unlimited Personal Liability
Limited Partner: Limited Liability to their capital contribution
Limited Partnership: Management
General Partner: Manages the partnership
Limited Parter: Does not manage, otherwise liability becomes unlimited
Limited Partnership: Transferability
Requires unanimous consent
Limited Partnership: Tax
Partner pays income tax
Limited Partnership: Recordkeeping
Must file records, but NOT accounts, at Companies House
Limited Partnership: Raising Finance
Cannot create floating charge
Limited Liability Partnership: Formation
(1) File relevant documents at Companies House
(2) Receive Certificate of Registration
Limited Liability Partnership: Liability
Partners generally not personally liable beyond their investment
Limited Liability Partnership: Management
Managed by the partners, but a managing partner may be appointed
