2. Company structures
Choosing between a variety of company structures can feel daunting for new founders, but the choice becomes clearer once you understand what each option covers and who it is designed for. Our expert company structure guides give you a simple overview of each one, so you can quickly identify the best option for your needs, whether it’s a solo endeavour, an equal partnership, a non-profit, or a larger organisation.
Articles & Guides
Not sure which company structure to choose when setting up your business? Explore the key features of UK limited companies, partnerships, and other legal structures. Learn how each one works, who it's for, and the obligations involved.
Companies limited by shares
Find out what a company limited by shares is and how to set one up in the UK.
Written byNicholas Campion
3 minutes
Companies limited by guarantee
Discover how companies limited by guarantee support non-profits with a solid legal framework.
Written byNicholas Campion
3 minutes
Limited liability partnerships
Learn how limited liability partnerships work and who they’re best suited for.
Written byNicholas Campion
3 minutes
Public limited companies
Learn what a public limited company is and how to form one in the UK.
Written byNicholas Campion
4 minutes
All Categories
These resources are Category 2 of 6 in the Resource Hub. Explore the rest of the journey, from forming your company to running it day to day.
Watch helpful videos on startup advice
Sole trader vs limited company - a quick guide
Converting from LLP to limited company: the benefits
What is a holding company?
Ready to start your company?
We help entrepreneurs make smarter decisions. Our business solutions and services provide clear support, so you can build your company with confidence. Our All Inclusive with Accounting Package has everything your business needs to start strong:
- Company formation
- Covent Garden registered office
- VAT registration
- Your own company secretary
- Accounting Standard Plan
Things to consider when choosing a business structure
- Whether you need personal liability protection
- If there are single or multiple owners
- Set-up costs and complexity
- If you have plans to raise investment
- If you need flexible profit distribution
- Ease of ownership transfer
- Whether your purpose is profit or non-profit
- If you plan to offer shares to the public
- Whether you're a professional partnership needing limited liability
- How you want profits taxed (corporation tax vs. partnership tax)
- Level of public reporting and compliance you can manage
Our founder’s startup story
Learn more about Graeme Donnelly, CEO and founder of 1st Formations, and how his entrepreneurial journey began.
Read Graeme’s StoryExplore useful articles from our blog on company structures
Is it worth forming a limited company? The insider’s guide
Forming a limited company is often worth it for those seeking personal asset protection, and aiming for a more credible, tax-efficient business structure. Key benefits include limited liability, brand name protection, and flexible income options. For growing businesses, freelancers, and professional services, incorporation supports scalability, trust, and long-term success, yet it comes with added admin and legal responsibilities.
Benefits of converting an LLP to a limited company
Converting from an LLP to a limited company provides significant benefits, including more favourable tax treatment on retained profits and dividends, structural simplicity, easier access to investment, and enhanced limited liability protections. This transition is particularly advantageous for professional services firms looking to expand and secure funding.
My experience with 1st Formations was easy and the instructions were clear for someone like me who has no business experience.
Julia Parker, Lettuce Publishing
Frequently Asked Questions
What should you consider when comparing business structures?
Key factors include personal liability protection, tax treatment, set-up and running costs, whether you have single or multiple owners, plans to raise investment, how flexibly you want to distribute profits, ease of transferring ownership, and the level of admin and public reporting you're prepared to handle.
How do I choose a business structure?
Start with your risk tolerance (do you need liability protection?), your growth plans (will you seek investors or go public?), your tax preferences (personal vs. corporation tax), and how much admin you're willing to take on. Many small businesses start as limited companies and change structure as they grow.
Can I change my business structure later?
Yes, it's common to switch business structure later down the line. For example, from sole trader to limited company. Each change has its own process, costs, and tax implications, so it's worth planning ahead.
Is a sole trader a company structure?
Not technically. A sole trader isn't a separate legal entity, so there's no distinction between you and the business and it offers no liability protection.
What does 'limited liability' actually mean?
It means your personal assets (savings, home) are generally protected if the business fails or is sued. Your liability is limited to what you've invested in the business, not your personal wealth.