Structuring your business

a A_____________gives the fledgling business person the advantage of the goodwill associated with the _____________ name, and, perhaps more importantly, the use of a proven method of business. The _____________ is also likely to provide some level of support in the way of training and marketing, making it less daunting than going it alone, though this will vary from firm to firm.

As well as the initial license fee and its renewal, there are likely to be ongoing fees taking a percentage of your turnover or put onto the price of the goods or services you sell.

Despite the high success rate, when some set out to be their own boss, that's exactly what they mean, and the loss of control a _____________ involves can be too high a price to pay.

b By far the most popular choice is to set up as a _____________. It's relatively easy; you just need to register as self-employed with the Inland Revenue and display your name, trading name and address on all business premises and stationery. Profits are treated as personal income and you can even use your personal bank account to run the business, though business transactions need to be clearly identifiable.

While the burden of paperwork may be pretty light for the self-employed, the financial liabilities are unlimited. The law makes no distinction between the business and its owner, so if it fails, your personal assets are at risk, which in itself is enough to put many people off.

c This goes doubly for _____________, which are for when two or more people want to go into business together. _____________are considered self-employed and, in the absence of any other agreement, will share the profits equally. ____________ are also personally liable for the debts of the business - jointly and severally liable, so if one _____________ can't pay his share of the debt, the others will have to. It is also worth remembering that it is a _____________, not a democracy, and each ____________ can make binding business decisions and contracts without the others’ consent.

d The_____________, and more recently the _____________ Partnership, were designed for those people who wanted to go into business for themselves but did not want to put their house on the line doing so. The mainstay of both is that they are separate legal entities to their owners, so creditors can only claim against the business's assets, not the personal assets of the owners.

Against this are the increased costs of setting these structures up - to set up and register a _____________at Companies House often costs about £500 through a solicitor - and a far greater administrative burden, including the requirement to register audited company accounts.

The Guardian

Glossary

fledgling - inexperienced put something on the line - risk something

daunting - frightening mainstay - most basic part

Inland Revenue - government authority which collects taxes

entities - things which have a separate identity