When starting a new business, one of the first decisions to make is the type of business structure that you will use to operate your business.
The decision is usually whether to set up as a sole trader or business partnership, in which case the legal identity of the business and the individual(s) running it are the same, or a limited company, where the business is a distinct legal entity for liability purposes.
If you're setting up alone, you can choose to start off as a sole trader (otherwise known as a sole proprietor).
If you're going into business with one or more colleagues, then a business partnership is an option. In this case you will need a Partnership Agreement.
A limited company is the most common business type. The business is then a separate legal entity that offers protection of personal assets from business risks and liabilities. A Shareholders' Agreement sets out the rights and obligations of the shareholders. You will need to issue a Share Certificate to each shareholder as evidence of their shareholding in the company. You will need to appoint a director or directors to run the company and a company secretary to deal with company administration.
Carefully consider what type of business entity is right for you and, if you choose to set up as a limited company, where you would like to incorporate your business. Different countries offer different tax schemes, and it's easier to start a limited company in some countries than in others.
Dragon Law can help. Contact us today to set up your company and jumpstart your business.