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Legal forms of business entity

Personal versus impersonal businesses. . In both of these forms, the people are the business. All assets are owned by them and all debts are owed by them in person. A company is a business in its own right. It sells, buys, accumulates wealth, incurs debts and employs people. If you form a limited company, you must clarify your relationship with it, e.g. as a shareholder, director or employee. .

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Legal forms of business entity

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    3. SOLE PARTNERSHIP LIMITED TRADER COMPANY UK (VAT Registrations) 41 27 30 UK (Tax Assessments) 66 17 17 US 71 10 19

    4. The business is owned by one individual only - but they may employ others. Some sole trader businesses are substantial organisations In the eyes of the government and the law, the owner is the business The owner has rights to all of the business’s income and assets The owner is liable for all of the business’s debts The business ceases to exist with the owner's death or retirement Profit from the business is treated by the government as personal income and taxed accordingly

    6. A partnership is a voluntary association of two or more people for the purpose of operating a business A partnership is in concept a collective of sole traders, and most of the same logic applies to their legal and taxation status However, each partner is responsible for all of the debts of the partnership under the concept of ‘joint and several liability’ A genuine ‘sleeping partner’, who provides capital but plays no part in management would have liability limited to their investment However, if no written partnership agreement exists, they would be a ‘deemed partner’ under the Partnership Act (1890)

    8. The limited company

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