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Types of company in the UK

Embarking on a business journey in the UK is akin to exploring a diverse menu, with each company structure offering its own unique flavor. It’s not just about navigating; it’s about savoring the options and selecting the one that perfectly complements your business palate. Whether you’re a global entrepreneur eyeing the UK’s vibrant market or a local dreamer taking your first steps, this guide is your trusted culinary map, unveiling the essence of the main company types in the UK. It’s your recipe for making a choice that not only fuels immediate success but also nourishes your business’s long-term vitality.

Sole Trader

The “Sole Trader” business structure in the UK is as straightforward as it gets. It’s exactly what it sounds like: a business run and owned by a single individual.


  • Straightforward to set up.
  • Complete control over business decisions.
  • Minimal statutory paperwork.


  • Personal responsibility for any debts incurred by the business.
  • Potentially higher tax rates as income increases.
  • Ideal for: Independent contractors, freelancers, and those testing a new business concept.


A “Partnership” is when two or more individuals team up to run a business together. They share responsibilities, profits, and losses, making it a joint venture.


  • Pooled resources and skills.
  • Shared responsibilities and risks.
  • Simple to establish.


  • Personal liability for business debts.
  • Potential for disputes between partners.
  • Ideal for: Professionals like lawyers or doctors, and businesses that benefit from combined expertise.

Limited Partnership (LP)

Similar to a standard partnership but with at least one ’limited’ partner who is only liable up to the amount they initially invested.


  • Limited liability for some partners.
  • More investment opportunities with limited partners acting as silent investors.


  • Requires at least one ’general’ partner with unlimited liability.
  • More complex to set up and operate than a standard partnership.
  • Ideal for: Businesses seeking investment without giving away control.

Limited Liability Partnership (LLP)

A hybrid structure that offers the benefits of a partnership and a company. Partners aren’t personally liable for debts the business can’t pay.


  • Limited liability protection.
  • Flexible profit distribution among partners.


  • More administration, such as company registration.
  • Public disclosure of business accounts.
  • Ideal for: Professional services firms like accountancy or consultancy firms.

Private Limited Company (Ltd)

A distinct legal entity from its owners. Shareholders have limited liability up to their shares’ value.


  • Limited liability protection.
  • Professional status which may enhance credibility.
  • Tax advantages and potential for increased profit.


  • Complex setup involving decisions like how to choose a company name and company name check.
  • Detailed annual filings and public disclosure of accounts.
  • Ideal for: Businesses looking to scale, secure external funding, or those that benefit from a corporate structure.

Public Limited Company (PLC)

A company whose shares can be purchased by the public and are traded on the stock exchange.


  • Ability to raise capital by selling shares to the public.
  • Enhanced business profile and credibility.


  • Rigorous regulatory requirements.
  • Vulnerable to market fluctuations.
  • Ideal for: Large, well-established companies looking to raise significant capital.