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What are the different types of business entity?

April 26, 2017Business different entity types

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What are the different types of business entity?

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10 Posted

There are a number of different legal entities through which you can run a business, each of which has different attributes: Sole Trader Trading Style: Peter Smith trading as Smiths Pharmacy. Liability/Ownership of Assets: There is no legal separation between the assets of Smiths Pharmacy and the assets of Peter Smith. If Smiths Pharmacy runs out of money the creditors can look to all of Peter Smith’s assets to get their money back whether those assets are to do with the business or not. Business Contracts: All business contracts (including the NHS contract) should be with Peter Smith himself. Tax: All profits of the business are taxed as personal income (i.e. at 40% – the higher rate) whether they are re-invested or retained in the business or not. Publicity: There is no formal register of sole trader businesses. Partnership Trading Style: Peter and Mary Smith trading as Smiths Pharmacy. Where more than one person owns the business it is not a separate legal entity (e.g. company, LLP)