What type of entrepreneur are you

Hello hivers!
Its been quite a while i dropped updates

Today i will be talking about

entrepreneurship legal entities

Image source: https://blogs.bath.ac.uk/business-and-society/2018/10/08/why-optimism-and-entrepreneurship/

i.e the sole trader, partnership, limit liability partnership & limited company

The Sole trader

This is the easiest status to set up, a sole trader or sole proprietorship works for no one, he sets himself up and is responsible for all risk profits and losses

Downside of sole proprietorship

1. The business and you are considered the same under the law, if the business is sued, then potentially everything you own is at risk.

2. If you make more profit than you draw out, you are still taxed on all the profit irrespective of whether you have taken the money, and with a 40% tax band

Partnership

This is where two or more individuals join together to run a business. Like the sole proprietor status, you are still liable for any debts personally, but this time they can be shared with your fellow partner

Note: when partnering make sure you have a strict partnership agreement drawn up

Limited liability partnership

This status shares some of the characteristics with both a partner and limited company, members of the limited liability partnership are registered at companies house az members, limited liability partnership is taxed the same as partnership, a limited liability partnership is a separate entity from its members, it may enter into contracts etc and sue and be sued in its own name.

Limited company

A limited company is a separate legal entity that has substantially all the legal rights of an individual, if anyone is sued, it will be the company and not you as an individual, a limited company pays a low starting tax rate of 19%

Entrepreneurship myths

1. Entrepreneurs are born not made
2. Entrepreneurs make more money
3. It takes a lot of money to start a business
4. Entrepreneurs must be a risk taker.

That will be all for today if you have any question you can ask in the comment section and i will reply ASAP