What type of business is in the UK?

In the UK, there are a number of different business structures that entrepreneurs and companies can choose from, which offer a variety of different legal and tax implications. The major types include:

1. Sole Trader: It is the easiest and most common form of organization in the UK. A sole trader can be a person or an individual owning and conducting the business. The owner is liable to account personally for all debts and liabilities incurred by the business. It is easy to establish and manage; however, the liability of the owner remains unlimited.
2. Partnership: Business owned by two or more people called partners who share a variety of responsibilities and profits. Two types of partnership exist:
   • Ordinary Partnership: Every partner has unlimited liability.
   • Limited Liability Partnership (LLP): The partners are not personally liable for any business debts. In this way, it offers protection akin to a limited company.
3. Limited Company: It is an organization which exists apart from its owners and provides limited liability. There exist two types of limited companies:
   • Private Limited Company (Ltd.): This is the most common form for small to medium-sized businesses. Ownership is confined to the shareholders, and there is no trading of shares to the public.
   • Public Limited Company (PLC): Similar to private companies but with the added ability to sell shares to the general public; thus, this type of business often consists of larger companies. For a PLC to be registered, it needs to hold at least £50,000 share capital.
4. Social Enterprise: A business model with a social or environmental focus; the profits within the business get reinvested for the growth of the business or community rather than distribution to the shareholders. The normal legal structures would either be a company limited by guarantee or a community interest company.
5. Franchise: An independent businessperson-the franchisee-operating under the brand and business model of an established company-the franchisor. Can take any legal form but in practice usually a limited company.

Read more: UK Company Formation

Each has its pros and cons, depending on the level of liability, complexity of setup, and tax treatment, as well as the amount of governance needed. The correct structure will depend on your business type, the extent of activities, and your strategic focus.