cfi-The Look and The Law Aug 09:The Look, The Law & The Knowledge 2009 07/09/2009 13:55 Pag
Like a sole trader, a partnership does not have to disclose its accounts publicly.
Like a sole trader, a partner has unlimited liability for the debts of the partnership.
1
9 This means that you could find yourself liable for the debts of the whole partnership.
Each partner is taxed on the same basis as a sole trader on the basis of income
and expenditure apportioned to each partner.
Partnerships should have a partnership agreement setting out all relevant
Y
ONS
provisions relating to the partnership.
T
L
The steps to take
• Each Partner must register as self-employed with HMRC; and
• Register the partnership for VAT if the total partnership turnover exceeds £68,000
VENPOR
in the previous 12 months and also notify HMRC of the individual Partners’
A details.
D
The paperwork
• Partnership Agreement
PRIVATE LIMITED LIABILITY COMPANY
Setting up a company is a more complicated way of running your business but it
does have some advantages. Useful information about incorporating a company
can be found on the Companies House website at: www.companieshouse.gov.uk/
infoAndGuide/companyRegistration.shtml.
Most small trading companies are private limited liability companies. These usually
have individual shareholders who are the owners of the business and directors who
run and manage the business on a day-to-day basis. Smaller trading companies
often have the same shareholders as directors.
A company can therefore be taxed and can contract with third parties and incur
liabilities. It can employ staff and consultants etc.
If you set up a company you are likely to become a director and as such you will
be an employee of the company. You will earn a salary and you can also be paid
monies by way of a dividend (a company distribution of profit).
A limited liability company offers better protection from liability. Shareholders’
liability is limited to the amount of money to be paid up as share capital. If all shares
are paid up (i.e. a £1 share is issued for £1) then the shareholder has no further
liability to the company. Directors are also usually not liable for a company’s debts
unless they do something wrong and the law states that they will be liable in such
circumstances (e.g. trading whilst insolvent).
In reality a start-up company seeking to take on premises or bank loans or enter
www.fashionfringe.co.uk
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47