Choose the right legal structure for your business

Introduction
http://www.businesslink.gov.uk/bdotg/action/layer? topicId=1077472554&r.li=1077910415&r.l2=1075193191&r.pp=11&r.l1=1075193156 &r.s=p Choosing the most appropriate legal structure for your business is an important step, and could affect the degree of financial risk you take on, the control you retain over the business and the level of day-to-day administration involved. By answering a simple series of questions, we can provide most people with a clear idea of the most appropriate business structure in less than five minutes. This tool does not encompass social enterprises. Please note: this tool is intended to provide useful guidance and should not be used as the only source of information when choosing a legal structure. We recommend that you seek professional advice before making a final decision. Go straight to the first question.

Subjects covered in this guide

Introduction Which legal structure is right for my business?

Which legal structure is right for my business?

You and your business
Do you plan to go into business on your own? Yes No

Have you been disqualified from being a director of a limited company? Yes No

Are you an undischarged bankrupt? Yes No

Are you under 16 years of age? Yes No

Where do you want to start your business?

Will your customers only be willing to buy goods or services from you if you have a limited company? Yes No

Which legal structure is right for my business?

Your attitude to administration
Administration is a necessary evil for all businesses.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I am confident I have all the skills I need to administer my business.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I can easily get access to all the skills I need to administer my business.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I am prepared to pay for professional help in areas like accounts, tax and statutory returns.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I am prepared to regularly allocate a proportion of my time to business administration.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I feel confident about filling in forms and statutory returns.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

Ch

Which legal structure is right for my business?

Your attitude to operating your business
I need to be totally in control of my business.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I'm not sure if I can do everything myself.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I want my business to grow quickly.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I will need to raise money to launch my business.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I want to start small and build my business gradually.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I want my customers to think my business is bigger than it really is.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I don't want the financial records of my business to be publicly available.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

Which legal structure is right for my business?

Your attitude to risk
All business involves some degree of risk.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

Losing everything if my business fails is a risk I'm prepared to accept.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I need to make sure those who depend on me are secure.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I am prepared to risk bankruptcy if my business fails.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I would prefer to operate a business structure that minimises personal risk.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

I would personally be able to pay off all my business debts if my business fails.

Strongly agree

Agree

Neither agree or disagree

Disagree

Strongly disagree

Che

Which legal structure is right for my business?

Conclusion Your answers indicate that the following business structure(s) would be most suitable for your business:

limited company

For more information about setting up as a limited company, see our guide on how to set up and register as a limited company (private or public). Please note: this tool is intended to provide useful guidance and should not be used as the only source of information when choosing a legal structure. Before making a final decision about which legal structure to adopt, we recommend that you take advice from your tax adviser or accountant. See our guide on how to choose and manage an accountant.

How we reached this conclusion

Not only does the tool assess your eligibility for certain business structures, it also makes an assessment based on the following criteria:

Your attitude to administration. Your responses indicate that you are confident in your own abilities to administer your business. Your attitude to risk. Your responses indicate that you would be willing to operate a business structure that entails a moderate degree of personal risk. Your operational priorities for your business. Your responses indicate you have no strong preference about whether your business structure should have an impact on the way you run your business.