Mediums

Question 1

Sole trader

Answer 1

• legally separate from sole owner
• No formalities required to incorporate. Requires registration with HMRC for tax purposes. No ongoing disclosure for compliance requirements.
  +No formalities to start up. Sole decision maker and can transfer business easily.
  -Unlimited personal liability for obligation of business.

Question 2

General Partnership

Answer 2

• Owned by several partners subject to a partnership act if none then rules set out in PA 1898, no distinct legal personality
• Partnership established by virtue of partners carrying on a business in common. No formalities required so possible to be in partnership unintentionally. So, entering into partnership agreement recommended
  +No formalities to start up, though a written agreement is strongly advised. Managed and run as the partners choose. #
  -Unlimited personal liability for obligation of partnership, jointly.
  -Multiple decision makers.
  -Default rule is one vote per partner irrespective of capital invested.
  -Partners can’t transfer share easily.

Question 3

LLP

Answer 3

SLP which still provides limited liability to its members.

+Partner generally not personally liable beyond their investment, nut may be required to give personal guarantees if loan required.
+Managed and run as partners choose.
+Can grant a floating charge.

-Formation requires registration at CH.
-Some info made public via CH.
-Ongoing formalities.
-Multiple decision makers.
-Default rule is one vote per partner irrespective of capital invested.
-Partners can’t transfer share easily.

Question 4

Limited company

Answer 4

Business structure with SLP . ile relevant documents at CH and receive a certificate of registration.
+SH generally not personally liable beyond their investment but may be required to give personal guarantees if loan required.
+Separation of ownership SH and management D.
+Earning can be taken out as dividends, D salaries of combination of the two.
+Generally, SH may transfer shares subject to the articles.
+Can grant a floating charge.

-Formation requires registration at CH.
-Some info made public via CH.
-Ongoing formalities.
-Multiple decision makers.