UHY Ross Brooke Chartered Accountants

Which is better a partnership or a limited company?

shareholders agreements and company valuations

The decision of whether to form a partnership or a limited company depends on your specific business needs and goals. Both types of business structures have their own advantages and disadvantages.

Advantages of a partnership:

  • Easy and relatively inexpensive to set up and maintain.
  • Flexible management structure.
  • Profits are shared among partners, which can align incentives.
  • Partners have personal liability and can manage the business directly

Advantages of a limited company:

  • Limited liability for shareholders, which means that their personal assets are protected in case the company goes into debt or is sued.
  • Separation of ownership and management, which can provide for more professional management.
  • Potentially more favourable tax treatment.
  • Easier to raise capital by issuing shares.

Ultimately, the decision which type of business structure is best for you will depend on a variety of factors, including your business goals, the level of personal liability you are willing to take on, and the amount of capital you need to raise. It’s important to consult with a professional accountant to help you make the best decision for your business, so if you’d like to review your options with us, please get in touch.

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