‘Keep it Legal’
While many doctors find their businesses suffering in the lockdown, others are planning to set one up. So what do you need to know to be within the law? Kirsty Odell gives guidance on the legal considerations you need to think about if you are setting up a UK healthcare business.
There are many ways to set up a new business and you need to consider not only what is right now, but in the future, because undoing a structure to create something new while in business is very disruptive, expensive and may even not be possible.
Each option has its own advantages and disadvantages and there will also be tax considerations to take account of.
Some of the main structures are as follows:
Sole Trader: This may be appropriate for a small business where an individual is providing the services alone, like a physiotherapist.
It is simple to set up and run, but does not have a separate legal personality, so you are personally liable.
Partnership: There are different types of partnerships, but a general partnership is where people are carrying on a business in common with a view to profit.
As with a sole trader, there is no legal personality, and each partner is liable for all the partnership’s obligations – regardless of which partner created them.
Limited liability partnerships: There are limited liability partnerships (LLPs) which are corporate entities but taxed in a similar way to general partnerships.
The members of an LLP have limited liability and the LLP has its own legal identity.
Limited liability company: Again, there are different types of companies, but limited companies are most common. They have their own legal identity and the shareholders have limited liability.
However, there are added administration costs and disclosure requirements which sole traders and general partnerships do not have.
Charity: If your business has a charitable/social aim, then a community interest company (CIC) or other social enterprise or charity may be an option.
They are still companies – as above – but have more stringent regulatory requirements. Charities enjoy several tax reliefs, and both are liked by the public sector as they are asset-locked. This means the organisation may be at an advantage in obtaining grants and some contracts.
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