Your task:
Identify 3 features of an unincorporated
business
Hints:
·
Limited liability
status and what this means
·
Type of tax payments
·
Which tax returns
should be filed (self-assessment tax return or corporation tax return)
·
What the owners are
called
Unincorporated businesses are businesses that are not set up with Companies House, so these are classed as businesses and cannot be called companies.
The
unincorporated businesses have less stringent rules to comply with along with
the tax requirements and only need to file annual tax returns with HMRC. The
owners do not have separate legal entity, hence there is no limited liability
status; so, if the business goes bust, the owners will be personally
responsible for the entire business debts. They would be expected to use their
personal assets to pay off the business debts if the business doesn’t have
sufficient resources to pay off its existing debts.
Unincorporated businesses include
·
Sole traders
·
Partnerships
Your task:
Identify 3 features of an unincorporated
business
Hints:
·
Limited liability
status and what this means
·
Type of tax payments
·
Which tax returns
should be filed
·
What the owners are
called
WHAT ARE INCORPORATED BUSINESSES?
Incorporated businesses are set up with Companies House and are governed by the Companies Act; and these require more stringent rules to be complied with along with the tax rules to comply with. The incorporation process establishes a company which becomes a separate legal entity from its owners.
They are required to file annual returns and annual company accounts with Companies House and also file annual tax returns with HMRC. These will include the different types of companies.
·
Private limited companies (LTD)
·
Public limited companies (PLC)
·
Limited liability partnerships (LLP)
Your task:
Identify 3 features of an incorporated business
Hints:
·
Limited liability
status and what this means
·
Type of tax payments
·
Which tax returns
should be filed
·
What the owners are
called
