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This includes any and all of your business debts.  \nThe profits you make until the 5th April of each year are declared on your tax return and classed as your personal income that year.  \nYou must pay income tax and national insurance on this at standard income tax rates. You do not need to register the business anywhere, but you should tell HMRC that you are in operation and self-employed for tax purposes. You must do this within three months of becoming self-employed.  \nNational Insurance contributions are usually lower asa sole trader. However, you will be entitled to fewer social security benefits.  \nThe administrative burden is far lower than the alternatives. You keep simple, unaudited accounts which list and record your business income and expenditure.  \nYou can form a limited company – or partnership – later down the line and transfer the business toit (though in some circumstances stamp duty may have to be paid).  \nSole traders can employ people.  \nPartnerships  \nA partnership arrangement is similar to that of a sole trader but differs in that it is a business owned by two or more people. All partners own a specified percentage of the profits paying tax on that percentage.  \nAs with a sole trader, each partner’s share of the profits is treated as their income.  \nPartners, like sole traders, are generally considered and taxed as self-employed.  \nAs a member of a partnership you will be personally or jointly liable for any debts incurred. This means that if another partner is unable to pay, you become liable for their share of any business debts.  \nNational Insurance contributions are usually lower asa member of a partnership than as an employee of a limited company. However, you will be entitled to fewer social security benefits.  \nYou may be able to raise money for your business by introducing new partners.  \nBusiness contracts entered into by one partner can be binding even if the other partners have not consented.  \nAs a partnership the risks of the business and the management responsibilities, decisions etc.  \nwill be shared. This will almost always mean it is sensible and prudent to draw up a comprehensive partnership agreement—this will help avoid disputes. On a positive note it will enable partners to stipulate who does what and the dividing lines when it comes to day to day functions and activities.  \nIt’s a good idea to get a solicitor or professional adviser to draw up a suitable agreement.  \nA good, comprehensive partne","cbCaijtaKSj6do7p","https://ap.wps.com/l/cbCaijtaKSj6do7p","pdf",3245955,16,"English","# Introduction\n# Sole Trader\n# Partnerships\n# Limited Liability Partnerships (LLPs)\n# Limited Companies\n# Starting Out\n# Changing your Structure\n# Key Considerations\n# Taking Advice\n# About Us\n# Compliance Statement\n# Contact Us","[{\"question\":\"What are the four main business structure options covered in this guide?\",\"answer\":\"The guide focuses on sole trader, partnership, limited liability partnership (LLP), and limited company. It notes other alternatives for social enterprises are not covered.\"},{\"question\":\"How does personal responsibility and liability differ under a sole trader structure?\",\"answer\":\"Under sole trader status, the individual and business are effectively the same for tax and legal purposes. The person is personally responsible for business debts, including all debts.\"},{\"question\":\"What makes an LLP different from a standard partnership?\",\"answer\":\"An LLP is described as a hybrid of partnership and limited company features, allowing partnership-style flexibility while limiting personal liability for business debts. It also requires registration with Companies House and annual accounts filing.\"}]","BUSINESS - SOLE TRADER, LIMITED COMPANY OR PARTNERSHIP - HOW TO DETERMINE YOUR BEST BUSINESS STRUCTURE - ISSUE 21 - JULY 19 | PDF"]