For the majority of organisations, choosing a business vehicle comes down to either Partnership or LLP (limited liability).
But as an organisational head or owner, how do you know which business vehicle is right for you?
The right business vehicle for you can be narrowed down to both individual circumstances as well as a range of varying factors, like legal requirements and tax considerations, among other things.
Let’s look at some of the key differences to help you decide.
The main underlying difference between a limited company and partnership is that the former is a completely separate legal entity. However, within partnerships, there are traditional partnerships and limited liability partnerships (LLP).
We need to consider both in order to see for ourselves whether it makes more sense to choose partnerships or either one of the LLPs as a business vehicle.
In a traditional partnership, you and your partner or partners own the business and must absorb all liabilities. This can be beneficial for a number of reasons:
This ‘hybrid’ vehicle was intended to combine some of the key benefits of a partnership with a limited company business structure. It’s become rather popular today for several reasons including:
The limited company business vehicle was specifically designed to facilitate running a business. It provides clarity and protection which other legal entities do not afford. Benefits include:
While the above are just some of the benefits at a glance of choosing either business vehicle, there are actually quite a few factors that must be carefully considered.
If you require any help with your business structure and tax duties, we at Key Business Consultants LLP have an expert team of accountants who will be able to assist. Get in touch with us today.
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