Does a business have to be a limited company?
The answer to this question is no, a business does not have to be a limited
company. A person setting up in business alone has the choice of not having
a limited company and conducting business on his or her own account as a self-employed
person (a sole trader), or of having a company registered. If there are two
or more people involved in the business then they have the choice of trading
as a partnership, a Limited Liability Partnership
(LLP) or of forming a limited company. If a limited company is not formed,
the owners of the business are personally liable for all the debts incurred
and run the risk of personal bankruptcy.
Many businesses start life as sole traders or partnerships and convert to limited companies later when the size of the business makes limited liability and a corporate structure more important, or for tax reasons. This database does not deal with the law relating to sole traders or partnerships.
Related topics
|
