When you’re starting up in business it’s good to know the opportunities that are open to you to ensure you find the right structure. Look at the difference between a partnership and public limited company options here…
Partnership Data
A partnership is simply two or more trading business partners (10 for banking business and 20 for ordinary business) sharing joint responsibility for a company including all profit and any losses. Taxes are paid on individual shares of the profits. Unlimited liability, debt, and assets such as equipment and stock are also shared. Advantages include tax favours as rather than receiving a salary through PAYE, partners take earnings from the company profits.
Operations are guided by the partnership deed act and accounts aren’t required to be published. The company is managed by the partners themselves and new partners can be admitted with the consent of existing partners. Shares and interest can’t be transferred without the agreement of existing partners.
To form a partnership is quite simple as no legal documents are necessary and agreement is by word or written. Capital will be described in the agreement and may be changed by mutual consent. Every partner can inspect and copy the accounts and there’s no legal requirement to keep statutory books. HMRC will need to be notified of operations.
Typically, one or two partners are selected to manage the company, and partnerships can’t issue any type of security to increase financial sources. Partnerships can also be easily dissolved with any partner serving a 14-day notice to other partners and may be affected by retirement or death of any partner.
Public Limited Company Explained
The day-to-day running of a limited company is the responsibility of its directors, but it’s legally owned by its shareholders. The formation of a public limited company takes time as legal documents have to be prepared and submitted to the registrar’s office at Companies House.
Shareholders aren’t liable to settle any company obligations, and there’s no upper restriction for maximum numbers of members, just no less than seven. Shareholders can dispose of their stock in the stock exchange market, can purchase property, and use its resources to sue.
The law requires statutory books and other accounts to be maintained, and profits are distributed among shareholders according to the decision of the Board of Directors. The company cannot be dissolved easily as a separate legal process will provide winding up according to the Provision of Company Act.
The life of the company isn’t affected by the retirement or death of any shareholders.
Find Payroll Services in London to Suit You
Bespoke outsourced services will cater for your partnership or public limited company needs. A specialist accountant in London will keep you up to date with any changes in legislation, ensure that all payroll obligations are met on time, and give you all the professional help you need with your financial responsibilities as a trader.
These payroll services for small businesses are designed specifically to take care of all aspects of income and tax deduction administrative operations. And you’ll be able to monitor it all in real-time.