By Legacy Chain Ltd
Thinking of starting a business? Before you dive in, you need to pick the right business structure — it affects your taxes, risks, and how much control you have!
Let’s break it down quick and simple so you can ace your exams and set yourself up for success.
1. Sole Trader – The One-Person Show
What is it?
You run the business alone and keep all the profits! But… you’re also responsible for any debts.
✅ Pros:
- Easy to set up
- Full control
- Keep all profits
❌ Cons:
- You’re personally responsible for debts
- Harder to get loans
- If you stop working, the business stops too
Example: Freelancers, tutors, and plumbers.
2. Partnership – Two (or More) Heads Are Better Than One
What is it?
Two or more people run the business and share profits, risks, and decisions
✅ Pros:
- Shared workload
- More money & ideas
- Easier to get funding than a sole trader
❌ Cons:
- Profits must be shared
- Disagreements can happen
- Unlimited liability (unless it’s an LLP)
Example: Law firms, dental practices, and accountancy firms.
3. Private Limited Company (Ltd) – Business With a Safety Net
What is it?
A separate legal entity from its owners, meaning your personal assets are protected if things go wrong.
✅ Pros:
- Limited liability (you only lose what you invest)
- Easier to attract investors
- More credibility
❌ Cons:
- More paperwork & rules
- Must share financial info
- Profits go to shareholders
Example: Small tech startups or tuition companies like The Legacy Chain Ltd!
4. Public Limited Company (PLC) – The Big League
What is it?
A company that sells shares on the stock market to raise massive funds.
✅ Pros:
- Can raise loads of money
- Limited liability for shareholders
- Business can keep running even if owners change
❌ Cons:
- Expensive to set up
- Risk of being taken over
- Strict regulations & must publish finances
Example: Big names like Tesco, BP, Rolls-Royce.
5. Franchise – Running a Business With Training Wheels
What is it?
You buy the right to run a business under a big brand’s name, following their rules.
✅ Pros:
- Less risk – proven business model
- Training & support from the franchisor
- Customers already know the brand
❌ Cons:
- High startup costs & fees
- Less freedom
- Profits must be shared
Example: McDonald’s, Subway, KFC.
So, Which One Is Best for You?
It all depends on your goals!
Starting small? Go for a sole trader or partnership.
Want protection? A limited company is safer.
Like big brands? Try a franchise
Dreaming big? A PLC might be for you (one day!).
And that’s it! Business Ownership made fun and simple!
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