Presentation on theme: "Sole | Partnership | Ltd | LLP | CIC Setting up as a sole trader If you operate as a sole trader, you have complete control over how your business is run,"— Presentation transcript:
Sole | Partnership | Ltd | LLP | CIC Setting up as a sole trader If you operate as a sole trader, you have complete control over how your business is run, you make all the decisions and take all the profits. You can hire employees. The start-up formalities are minimal and costs are correspondingly low. You must register as self employed by contacting HM Revenue & Customs (HMRC There is unlimited liability for debts, so if your business loses money, you may have to sell your personal assets (house, car and so on) to pay off business debts. Setting up a partnership Each partner needs to register as self employed. Partnerships are often entered into by groups of professionals, such as lawyers and accountants, who work together to share skills and knowledge.
Sole | Partnership | Ltd | LLP | CIC Setting up a limited company The biggest difference between limited company status and sole trader or partnership status is that a limited company is treated as a separate entity from its owners, with its own legal existence. Shareholders (or members) of the company can be individuals or other companies. They are not liable for the debts of the company unless they have given personal guarantees on, say, bank loans. Limited Liability Partnership (LLP) An LLP is really a hybrid of a partnership and a limited company. Community Interest Company (CIC) This is essentially a limited company, whose primary objectives are social or for community benefit rather than profit making.
What are the duties and liabilities of a company director? In order for a limited company to operate, its shareholders delegate the day-to-day management responsibility to a board of directors. Formal and specific powers and rules are set out in the Memorandum and Articles of Association (the constitutional documents of the company). Directors have a duty to promote the success of the company and must consider all of the long-term consequences and implications of their decisions considering their employees, customers, shareholders, suppliers, community, environment and company's reputation Act within their powers and take responsibility for their own decisions and exercise appropriate judgement on any information that assists in reaching these decisions. Directors are expected to have knowledge of all areas of the business, or engage specialists to help them.
What are the duties and liabilities of a company secretary? Traditionally, it has been the company secretary who has performed these vital administrative duties. However, since April 2008, private companies are no longer required to have a company secretary, but for this task you must have one. As an officer of the company, a company secretary will also be criminally liable, along with the other directors The following are duties typically performed by a company secretary: Ensuring the company complies with the company's constitution Maintaining company records - register of directors, names and roles. Records of minutes of general meetings and filing an annual returns Company records must be made available for inspection