Put simply, your business is anything which makes you money (hopefully) by trading where someone else is not employing you, i.e. you are not under the PAYE system through an employer. This could be anything from a Gardener to a Window Cleaner, a Child Minder to a Paper shop.

 

There are different forms a small business could take, depending on how you want to run it.

 

• A Sole Trader- Someone working for themselves, who has registered with the Inland Revenue as self employed. These could be plumbers, florists, joiners-even most dentists are self employed! This is the easiest form of business to start.
• A Partnership- Two or more self employed people working together for business under a partnership agreement
• A Limited Liability Partnership- Two or more self employed people working together for business under a partnership agreement, who have registered with Companies House (body which regulates Limited Companies).
• A Limited Company- An organisation made up of at least two people (one director and one company secretary) who have registered with companies house. This is the most complex form of business.

There are pros and cons to each form of business listed above, some are easy to set up, some leave you with all the business liability if the business runs into problems.

 

If you want to start up a community or social enterprise “not for profit” with a group of people, there are also other forms of business.

 

Before you decide on what form your business will take, it is vital to get advice and talk to a business adviser.