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Introduction There are many types of organisational structure a business may decide to adopt This assignment will examine the four main different business structures and present the advantages and disadvantages of each one The business structures that I will be examining are as follows The Sole Trader The partnership The Private Limited Company LTD The Public Limited Company PLC Sole trader A sole trader is an organisation which is owned by one person The assets and liabilities of the owner and those of the business are the same There are no legal or tax distinctions between the owner and business This type of business is straightforward to set up and dissolve It requires the minimal legal requirements and costs The owner can make all the decisions and can retain all the profits He owns all the assets of the business The owner can draw or invest funds into or out of the business as he deems necessary Business losses can be offset against other income including claw back of past pay as you earn PAYE As the sole trader is self-employed he is able to defer Income Tax and reduce his National Insurance contributions The owners personal assets can be transferred to a spouse or any other relative However the assets may be required to be returned by the court if it is satisfied that they were transferred to defeat creditors that were owed money There is no legal requirement to have the accounts and records audited No public disclosure of accounts and records is necessary unless the business is registered for Value Added Tax VAT There is no requirement to register for VAT unless the taxable supplies to customers is equal to or exceeds the registration level The registration level is currently 50000 for a twelve-month period The main disadvantage for being a sole trader is the unlimited liability factor The sole trader
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