Types of Organizations and Liability

A single person running a business, easily set up with few regulations, and having unlimited liability.

The owner's personal assets are at risk if the business owes money.

Two or more people carrying out business together with a view to making a profit (unlimited liability often).

A partnership registered at Companies House with limited liability which is taxed like a partnership.

Owners' liability for business debts is restricted, usually to their investment.

A partnership with some partners having unlimited liability and others having limited liability, where limited liability partners cannot manage the business.

Different legal structures businesses can use based on liability, governance, and financing.

The type of organization impacts liability, how its governed and how it raises funds.

Organizations providing public services like healthcare, education, and emergency services, often funded by taxes.

Sole traders typically fund their businesses through personal savings, business profits, or loans from family and friends.

A legally non-required document detailing partner rights, responsibilities, profit sharing, and handling business issues like partner deaths or new joiners.

Partnerships usually find it easier to get funding from banks compared to sole traders due to shared risk.

A Partnership needs a written agreement if any disagreements arise, especially for legal operation, profits, & partner changes.

Sole traders handle all business decisions themselves. This may lead to faster decisions, but potentially lack diverse viewpoints.

Owners (shareholders) have limited liability, meaning their responsibility is restricted to the amount they invested in the company.

A company legally structured so its owners' liability is limited to their investment, and formed as per the Companies Act, with one or more directors, registered at Companies House.

A company that's publicly traded, owned by many stakeholders known as shareholders, has at least 2 directors and 2 shareholders, and must have a registered company secretary, registered at Companies House, formed as per the Companies Act (2006).

An organisation that doesn't aim to make a profit as its primary goal, and doesn't have external shareholders.

Charities, voluntary groups, and other organizations in the private sector that have social objectives, and aren't primarily focused on profit, funded by donations and grants.

Government/state-funded organizations providing public services like emergency services and healthcare. Funds are raised through taxes.

A recognized legal entity with separate legal standing from owners. They are treated as a business entity in the eyes of the law.

An organization that lacks separate legal standing, treating the owners as the entity.

A partnership registered at Companies House with limited liability. Each partner's liability is limited to their investment.

The type of organization chosen has an impact on several key factors such as liability, governance, and funding.

Different business structures have different advantages and disadvantages, so choosing the right one is crucial for the business's success.

Owners of a limited company are only responsible for the amount they invested in the company, protecting their personal assets.

A company with restricted ownership, formed under the Companies Act (2006), with one or more directors, whose owners' liability is limited to their shares.

A company allowed to sell shares to the public, formed under the Companies Act (2006), with at least two directors and shareholders, and a qualified company secretary.

An organisation that prioritizes a social, environmental or charitable cause over profit, doesn't issue dividends, and raises funds through donations, grants, or government funding.

A not-for-profit organisation with separate legal status from its owners, meaning it can exist as an entity independent of its founders.

A not-for-profit organisation without separate legal status from its owners, meaning the owners are personally liable for the organisation's actions.

Organizations providing public services like healthcare, education, and emergency services. They're funded by taxes and don't focus on profit.

LLPs operate similar to partnerships, but have limited liability. They also have a written agreement to govern their operations.

LLPs can find it easier to raise funds than partnerships due to lower risk for lenders.