What are Unincorporated Businesses?

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