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Which Business Structure Is Good For You?


When you start a company in the UK, it is imperative to know which business structure is suitable. A business structure is a legal framework in which your business operates.

So, without further ado, let’s take a look at the various company formations and learn how we can help you to form the right company in the UK.

There exists, in the UK, different business structures. Here’s a brief overview of why the particular structure might work for you.

Limited Liability Partnership

It is a type of partnership where the partner’s liability corresponds to the amount of money they have invested in the business. LLPs need to be registered with the Companies House and must file taxes with HMRC.


  • Protects the person from bankruptcy and lawsuits
  • Personal and private life are separate so there is easier accounting.
  • You can borrow more when using a business bank account.

Limited Partnership

Company founders are protected from taking liability. Personal finances are different from the company’s finances in this type of organisational setup.


  • Protects your personal finances from the company’s finances.
  • Company can sell shares
  • Most credible and respected business structure.


When two sole traders work together it is known as a partnership. They are responsible for profit, losses, and legal issues within the partnership.


  • The two partners share the risk of the business.
  • There is increased borrowing capacity as more capital can be invested from two traders.
  • Better collaboration and innovation between the two business persons.
  • You can easily choose to include more partners if you so desire.

Sole Trader (Sole Proprietorship)

This is the simplest structure of a business. 99% of business owners start as a sole trader. Unfortunately, in this setup, both you and the business are considered one entity. Profits of the business are your profits and losses to the business are your losses. Any legal problems will be directly connected to you.


  • It’s a very easy way to set up the sole trader on the HMRC business.
  • If your business is successful, you get all the profits.
  • It’s easier to scale up your business from that of a sole trader.

company formation


If you are looking at company formation in the UK, do reach out to us at Formationshunt. We will help you with the needful!

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