Legal Structures

Legal Structures | Savvy Mums Business

There are several different legal structures you could run your business under, and each has different advantages and disadvantages as well as different tax and legal responsibilities.

The simplest way to get started is by registering with HMRC as a sole trader (or partnership if there’s more than just you). And this is the most common way for small one/two person businesses to get set up.

This involves less red tape and paperwork than forming a limited company, but also leaves you open to more risk. You and your business are seen as 1 legal entity – so what’s yours is the business’s and vice-versa, meaning that getting into any debt, personally, or through the business, or being sued, potentially puts everything at risk.

What legal structure should you choose?

Ideally, you should seek the professional opinion of an accountant to help you decide which legal structure would be best for you and your business, not only when you start out, but if your business grow significantly. It’s very common for people to start off as a sole-trader and then turn the business into a limited company once it starts to produce more income, needs to take on staff or have premises of its own.

More about each is explained on the GOV.UK website…

Options for legal structures


If you’re setting up a community group or charity the options are different. To make sure your project is easy to manage and tax efficient it’s worth getting the help from an accountant from the offset.