When you decide to start your own business, the first thing that you need to do is to decide on the legal form your venture will take. There are various business structures available for you explore, and the registration procedures that you need to do are different for each structure. The major business structure available to entrepreneurs today are; sole proprietorships, partnerships, corporations, trusts and companies. Companies could either be private or public.
Sole proprietorships are companies owned by an individual for the sole purpose of doing business alone. These companies are not incorporated and their liability status is unlimited. This form of business ownership is mostly preferred by people who are new to the sometimes murky world of business. Their structure is simple to operate and the cost of starting them are also very low, hence the reason for their preference. People who opt to run these structures are doctors, consultants, lawyers, or multi level marketing individuals.
Personally, i find it a very risky business venture to run and operate. However, the structures are simple although one is compelled to keep clean records of accounts, and when you are disciplined enough to keep them, you find that they are so simple. You are personally legally liable to any decision that you make and any losses that accrue are met from your pocket. It is also very difficult to find start up and running capital since you are all alone. Getting equity financing could also be very hard since entrepreneurs and investors would prefer other forms of business structures.
In order to be fully tax compliant, ensure that you register yourself as been self employed with the tax department, since they will require you to do your own tax assessment at the end of the year. Your Class two and class four National Insurance deductions an the profit you declare will need to be paid. It is also good to mention here that, for sole traders, the profits they manage to make are treated as income and also taxed as such by the revenue department.
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