Getting it right! It is important you choose the right business structure, since, the right business structure will not only help your business grow and succeed, it will also affect your day-to-day organisational structure and exposure to financial risks.
There are many types of structures to choose from, each have their own pros and cons. Identifying the right structure requires looking at the whole picture and not just one or two elements.
The factors to consider are:
- Other income, what rates of tax you are currently paying?
- Administrative burden, are you after something simple or donâ€™t mind extra admin in return for saving some money?
- Future plans, what are your future plans, will you reinvest your money in expanding or take a couple of years off to tour the world?
- Partners, do you have business partners and what are your profit share arrangements. Do you need flexibility on profit sharing?
- Financing, will you need to finance the business venture?
- Risk, is your business high risk, do you need to limit your liability?
- Image, will your business benefit from having its own legal entity?
These are only some factors to consider when choosing your business structure.
What can we do for you?
We can help you make the right choice. We will explain what options are available to you and help you make the right choice according to your specific situation. We regularly help locum Doctors decide on whether they should incorporate or not and explain the risks and consequences in doing so (see IR35).
We can help setup your new business, whether you choose to be a sole trader, partnership, Limited Liability Partnership or Limited company. We offer a fixed fee service and payment options to suit your cash flow requirements.
We will guide you along the way. We will explain what records you will need to keep, advise you on the best way to keep your records and advise you of when your tax payments are due.
To be or not to be a Limited Company
We know there are many websites (mainly accountantsâ€™ websites) that will highlight the benefits of trading through a limited company over sole trader but we donâ€™t think that is fair. Quite often, we have found clients have been ill advised in setting up a limited company and believe the main reason for this is because accountant fees are higher for a limited company.
We believe a simple list of advantages vs disadvantages of trading through a limited company would not help our clients. There are many factors to consider before deciding whether you should trade through a Limited company or not, we would discuss these with you to help identify whether a limited company is right for you.