Different Business Types

Question 1

Sole trader

Answer 1

One individual in total control, cheap and easy with no legal formalities in setting up

However it comes at a potential risk of losing personal assets as no limited liability

Question 2

Partnership

Answer 2

Shared management, ideally lay out arrangements in partnership agreement otherwise partnership act 1890 applies

Potential loss of personal assets, individual partners responsible for actions of others in partnership

Question 3

Limited liability company

Answer 3

Liability of the owners is restricted to amount agreed to invest, more ways of raising finance

Disclosure of information/ regulations more onerous
Additional costs associated with administration