When the time comes to select the right structure for your business, there are three main configurations to consider, each of which has advantages and disadvantages.

The issues that you will have to consider are:

• The way you want to raise money for your business
• How you want decisions to be made
• Your personal liability should the business fail
• The amount of administration required internally
• The amount of tax and national insurance you will have to pay

You should think about these issues and decide their importance to you, as they will determine which business structure you choose. The three business structures are:

• Partnership
• Limited company
• Limited liability partnership

While we would recommend reading the individual articles on each document for a more complete description of the advantages and disadvantages, in brief:

Choose a partnership if:

• There are 20 or fewer of you
• You are willing to be entirely liable for any losses whilst taking all of the profit
• You want to minimise the administrative costs
• You want flexible decision-making

Start your partnership agreement now

Choose a limited company if:

• You want to raise external capital
• You do not want to be liable for business losses and are willing to limit your profit taking
• You are not concerned about the administrative costs

Start your shareholders agreement now

Choose a limited liability partnership if:

• You want to minimise administrative costs
• You do not want to be liable for business losses
• You want flexible decision-making

Start your limited liability partnership agreement now