Topic

Business Structure

Choosing and setting up business structures

Business Types

Prepare charity accounts using SORP

Charities that prepare accruals accounts follow the Charities SORP, and your gross income decides whether you can use receipts and payments, need an independent examination or must be audited. Send accounts and the trustees' annual report to the Charity Commission within 10 months of your year end.

Register a charity with the Charity Commission

You must register a charity in England or Wales with the Charity Commission if its annual income is over £5,000 or it is a CIO. To qualify, its purposes must be exclusively charitable and for the public benefit, with eligible trustees and a governing document. Registration is free and online.

Follow the Code of Fundraising Practice and your trustee duties

How the Code of Fundraising Practice and your trustee duties under CC20 apply when your charity raises money, including the agreements and solicitation statements you need with professional fundraisers, the fundraising disclosures in your trustees' annual report, and the data protection rules for direct-marketing appeals.

Add or remove a partner

When a partner joins, leaves or dies, follow your partnership agreement. Without one, a general partnership can end on a partner's death, bankruptcy or notice. A leaving partner stays liable for debts from their time in the firm, and for later ones unless creditors are told and a Gazette notice is published.

How partners pay tax on profits

Each partner pays Income Tax and Class 4 National Insurance on their share of partnership profits through their own Self Assessment return. The partnership itself pays no tax. Your share depends on your partnership agreement, and your share of any loss can reduce tax on your other income.

File your partnership tax return (SA800)

A partnership files an SA800 return for each tax year, even if it made a loss, by 31 October on paper or 31 January online. One nominated partner completes it and gives every partner their profit share. If it is late, each partner who was in the partnership pays the penalty.

Set up a community interest company (CIC)

A community interest company (CIC) is a limited company for social enterprises, with an asset lock and a test that it benefits a community wider than its members. Register by filing Form IN01 and a CIC36 community interest statement with Companies House; the CIC Regulator decides whether you qualify.

Understand your duties as a charity trustee

Charity trustees have six legal duties: pursue the charity's purposes for public benefit, follow the governing document and the law, act in its best interests, manage its resources prudently, use reasonable care and skill, and keep it accountable. Anyone with ultimate control of a charity is a trustee, whatever their title.

Choose a partnership structure

A general partnership leaves every partner personally liable for the firm's debts. A limited partnership protects investing partners, who cannot manage. A limited liability partnership protects all its members, who can all manage, but must file accounts at Companies House. Your choice turns on liability, management and public filing.

Register a business partnership

Every partnership registers with HMRC for Self Assessment by 5 October in its second tax year. The nominated partner registers the partnership, then each partner registers separately. A limited partnership or limited liability partnership registers with Companies House first.

Set up or convert to a limited liability partnership

An LLP gives its members limited liability while they are taxed like partners. Check it suits you, register it with Companies House with at least 2 members, agree a members' agreement, and plan the transfer of the business if you are converting an existing partnership.

Start a business while on Universal Credit

Yes, you can be self-employed and claim Universal Credit in Great Britain. You must report your business income and expenses every month, and after a start-up period a minimum income floor can reduce your payment.

Register a charity with OSCR

Any organisation calling itself a charity in Scotland must register with the Office of the Scottish Charity Regulator, whatever its income, and must keep meeting the charity test. Using the word charity or a Scottish charity number while unregistered is an offence, and a charity working in both Scotland and England registers with both regulators.

Understand CIC asset lock rules

A CIC's assets and profits are locked in for the community: it can transfer them only for full value, to an asset-locked body or for community benefit. Shareholder dividends are capped at 35% of distributable profits, and on winding up what is left goes to asset-locked bodies, as the Regulator directs.

OSCR annual reporting and charity accounts

Every charity on the Scottish Charity Register must file an annual return and accounts with OSCR within 9 months of its year end. The return includes an online monitoring return, and your gross income decides whether you prepare receipts and payments or accruals accounts and what external scrutiny you need.

Create a partnership agreement

A partnership agreement sets out how you share profits, make decisions and handle a partner joining, leaving or dying. The law does not require one, but without it the Partnership Act 1890 default rules apply, and they rarely match what partners intend.

Register a charity in Northern Ireland with CCNI

Every organisation in Northern Ireland that meets the charity test must register with the Charity Commission for Northern Ireland, however small, because no income threshold is in force. Prepare your governing document first, then register through the Commission's Expression of Intent process when it calls you forward.

Sole trader or limited company

Compare the two most common business structures and choose what's right for you.

Charity trustee duties and CCNI enforcement in Northern Ireland

Your legal duties as a charity trustee in Northern Ireland, CCNI's statutory inquiry and protective powers, and how these differ from the Charity Commission for England and Wales.

Report annually to the Charity Commission for Northern Ireland

Every charity registered in Northern Ireland must send the Charity Commission an Annual Monitoring Return, with accounts, a trustees' report and an examiner's or auditor's report, within 10 months of its year end. Your income decides the type of accounts and whether you need an independent examination or an audit.

Meet your ongoing CIC compliance obligations

Every CIC must file a community interest report (form CIC34) with its annual accounts at Companies House within 9 months of its accounting reference date, and deliver a confirmation statement at least once a year. The CIC Regulator reviews the reports and complaints but does not supervise CICs proactively.

Trustee duties under Scottish charity law

Your legal duties as a charity trustee in Scotland, including the general duties under the 2005 Act, the expanded disqualification criteria introduced by the 2023 Act, and what to do if things go wrong.

Understanding OSCR and Scottish charity regulation

Charity regulation is devolved, so charities in Scotland answer to the Office of the Scottish Charity Regulator under Scottish law, chiefly the Charities and Trustee Investment (Scotland) Act 2005. OSCR registers charities, monitors their returns and investigates misconduct, and the 2023 Act strengthened its powers.

Respond to an OSCR inquiry

If the Office of the Scottish Charity Regulator (OSCR) opens an inquiry, the trustees must reply fully and honestly by each deadline. OSCR can then close it, make recommendations, give directions or suspend people, or ask the Court of Session to act. You can ask for a review and appeal.

Company Formation

What must appear on your website, emails, invoices and premises

A limited company must show its registered name on its website, emails, invoices and premises, and its number, registered office and country of registration on its website, letters and order forms. A sole trader or partnership must show its names and an address only if it trades under a business name.

Register a trademark

Registering a UK trademark with the Intellectual Property Office gives you exclusive rights to your business name, logo or slogan for the goods and services you choose. Search the register first, choose your classes carefully, and allow 3 to 4 months for registration if nobody objects.

Check your business name is available

Before you commit to a business name, check it is free at Companies House, on the UK trademark register, and as a domain name and social media handle. Companies House only blocks identical names, so a similar name can still lead to an objection or a trademark claim.

Business Naming

Business name rules

Limited companies and LLPs must register a unique name with Companies House, with the right ending and approval for any sensitive words. Sole traders and partnerships can trade under a business name but must show the owners' names on business documents. No name may infringe a registered trademark.

Business Acquisition

Franchise your business

How to decide whether your business can be franchised, protect your brand and know-how, write a franchise agreement that stays within competition law, and recruit and support franchisees honestly.

Negotiate and structure your acquisition deal

Negotiate a business purchase in order. Make a written offer, agree a short exclusivity period for due diligence, settle non-binding heads of terms, then negotiate the sale and purchase agreement. Decide shares or assets first, and check whether the deal needs government or competition clearance.

Your first 90 days after buying a business

What you must set up after buying a business depends on what you bought. If you buy a company's shares, its staff and tax registrations stay with it. If you buy a business's assets, the staff transfer to you under TUPE, but you need your own payroll and insurance.

Running a business from home

Most home businesses need no planning permission, as long as your home stays mainly a residence. Before you start trading, tell your mortgage lender or landlord and your insurer, choose how to claim tax relief on household costs, and avoid using a room only for business so you keep private residence relief.

Conduct business acquisition due diligence

Before you buy a business, investigate its finances, legal position and commercial health to check the seller's claims and find hidden risks. Watch for warning signs such as most revenue coming from one or two customers or falling margins, and use a solicitor and accountant.

Find a business to buy

How to identify and source business acquisition opportunities through brokers, online marketplaces, direct approaches, and succession opportunities.

What happens on completion day

On completion day, the business legally becomes yours: funds are transferred, the final documents are signed and dated, and the seller hands over keys, records and passwords. Then tell your bank, insurers, HMRC and important customers and suppliers.