Three Most Common Types of Small Businesses – Sole Proprietorship, Partnership and Private Limited Company
Posted by learnaccounting on December 21, 2007
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Starting Business said
There are a couple of important points to consider when deciding between limited compant, partnership or sole trader-
Limited liability – as a sole trader or partner you have no protection over liability. As a limited company you have some protection against any potential liabilities.
Tax efficiency – Under the present tax system owners of limited companies can save tax by payment of dividends instead of paying tax as a sole trader or partner.
It must be stressed that personal circumstances need to be considered when making the decision between LTD or Sole Trader. There is no single solution that fits all. If in doubt seek financial advice from a tax consultant or accountant