Which UK business structure is right for you? Every option and who it suits.
The UK offers several legal forms that differ in liability, number of founders, tax and administration. We can form each of the structures below and then look after its accounting and tax.
Quick recommendation: for most founders a Ltd (private company limited by shares) is the best choice. An LLP suits two or more partners who want tax transparency, a PLC suits larger projects with public shareholders, and a company limited by guarantee suits non-profit purposes.
Private Limited Company (Ltd)
The most common form: a limited liability company owned by shareholders. One director and one shareholder are enough (they can be the same person) and there is no minimum share capital. Profits are subject to Corporation Tax and paid out as dividends.
👉 Ltd in England · Ltd in Scotland · Ready-made Ltd
Public Limited Company (PLC)
A company whose shares may be offered to the public. It needs at least two directors, a qualified company secretary and allotted share capital of at least £50,000, a quarter of which must be paid up.
Limited Liability Partnership (LLP)
A partnership with limited liability for at least two members. The LLP is a separate legal person but tax transparent – profits are taxed in the hands of the members, not the LLP.
Company Limited by Guarantee
A company without shares whose members guarantee a nominal amount (usually £1). Profits are not distributed but used for the organisation's purpose – the usual form for clubs, associations, foundations and charities. Under certain conditions “Limited” can be omitted from the name.
Community Interest Company (CIC)
A social enterprise: a limited company serving a community purpose, with an asset lock. Registered at Companies House with the approval of the CIC Regulator – available on request.
Dormant company
An ordinary Ltd that is not trading yet – to secure a name or prepare a project. It files dormant accounts and an annual Confirmation Statement.
Sole trader and partnerships
A sole trader registers for Self Assessment with HMRC only and has unlimited liability. A general partnership has no limited liability, while a Limited Partnership (LP) is registered at Companies House and needs at least one general partner with unlimited liability. We can handle these registrations, though in most cases we recommend a Ltd or LLP for limited liability.
At a glance
| Structure | Minimum founders | Liability | Tax |
|---|---|---|---|
| Ltd | 1 director, 1 shareholder | limited | Corporation Tax |
| PLC | 2 directors + secretary | limited | Corporation Tax |
| LLP | 2 members | limited | transparent (members) |
| By guarantee | 1 member, 1 director | nominal guarantee | Corporation Tax (reliefs possible) |
| Sole trader | 1 person | unlimited | personal income tax |
Watch your tax residence: a UK company that is effectively managed from another country may become tax resident there. We discuss how the company will be run before it is formed.