Type of business

Self-employed/Sole Proprietor/Sole trader

Someone who is self-employed, a sole proprietor and/or sole trader will work for themselves, although they may also have people working for them. They will pay Income Tax on their taxable profits through Self Assessment. They may also need to pay National Insurance. If they employ people, they will usually have to operate PAYE (Pay As You Earn) on their employees earnings and send an Employer Annual Return to HM Revenue and Customs (HMRC) online.

Partnership (Self-employed)

A business partnership is where two or more people set up a business together. Each partner is personally responsible for all the business debts, even if the debt was caused by another partner. Each partner is responsible for paying tax on their own share of the taxable profits and needs to show their share on their Self Assessment tax return. Each partner may also need to pay National Insurance. If the partnership employs people, it will usually have to operate PAYE on their earnings and send an Employers Annual Return to HMRC online.

Limited Liability Partnership (LLP)

An LLP is similar to an ordinary partnership, but it offers reduced personal responsibility for business debts: each partner's liability is limited to the amount of money they have invested in the business.

Corporate Body/Limited Company

The term corporate body is used to describe a limited company registered with Companies House in the UK or a company that is incorporated outside the UK. In contrast to other types of businesses (for example sole proprietor or partnerships), or unincorporated bodies (for example, members' clubs), a corporate body/limited company is a legal entity distinct from its shareholders (or members) and directors. Corporate bodies/Limited companies must also file certain documents with Companies House. Companies House filing requirements are separate to what the company needs to do for HMRC Corporation Tax purposes.

Unincorporated body

An unincorporated body is a business or other body such as a members' club, society or co-operative that is not incorporated as a limited company. It does not include sole proprietors, partnerships, local authorities or local authority associations.