Legal Entities

1. Private limited company limited by shares look after everything to do with their business, its finances are separated from your personal finance. Directors often own shared but they don't have to own any at all. Shareholders cannot sell or transfer their shares without offering them first to other shareholders for purchase. Shareholders cannot offer their shares to the general public over a stock exchange.

2. Sole traders are people who are self employed. Sole traders run their businesses as an individual, this means that they keep all the businesses profits after the taxes have been paid on them. Sole traders can employ staff and don't have to work alone but the sole trader is personally responsible for any losses the business makes.

3. Public limited company is a system you can set up to run your business, it has its own responsibility and is reliable for everything it does, its finances are also separate from the owners. Any profit that the company makes it owned by the company until it pays corporation tax when it can then be owned by the owner of the company

4. A private limited company limited by guarantee, (LBG)  is an alternative type of corporation used mainly by charities and other non-profit organisations. LBGs usually don’t have a share capital, nor do they have shareholders, they instead have members that act as guarantors. It is common for companies to retain their profits within the company in order to re-invest in its operations instead of distributing the money to its members.

Other than charities, community projects, societies, clubs, often set up as a LBG, having at least one director and one member. Unlike companies limited by a share, a guarantee company can be exempt from having the word ‘limited’ or ‘ltd’ if it's set up for a certain nonprofit purpose, often charities. These companies still have to file accounts and annual return at a company house each year.

 6. In a business partnership, you and your business partner (or partners) personally share responsibility for your business.

You can share all your business’s profits between the partners. Each partner pays tax on their share of the profits.
 A partner doesn’t have to be an actual person. For example, a limited company counts as a ‘legal person’, and can also be a partner in a partnership. If the partnership has debts, the partners are jointly liable for any amounts owed and so are equally responsible for paying off the whole debt.

7. An ‘unincorporated association’ is an organisation set up through an agreement between a group of people who come together for a reason other than to make a profit.

8. A  limited liability partnership (LLP) requires at least 2 other designated members, they can either be a person or company and will be known as a corporate member.Each member pays tax on their shares of profit like an ordinary business partnership, but aren’t personally liable for any debts the business can’t pay. E.g. One partner cannot be responsible or liable for another partner's misconduct.Unlike Limited partnerships, LLP’s only pay debts by how much they invest in the company. Whereas limited partnerships split the debt equally among them.