What type of company should I form?

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I’m completely ignorant when it comes to company formation. I’m straight out of university, and would like to set up my own photography business as an official company. I’m not sure which company type I should go for, though. There appear to be a few different options. How should I go about deciding? Or rather, what traits should a company have to fit into each company type? I apologise, I know this is an open-ended question. But any insight you could provide would be a huge help.

Answers

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A company limited by shares is the most suitable company type for commercial businesses that intend to make a profit. This would probably suit your photography business well because you can issue shares and pay yourself tax-efficiently with a salary and dividends.

A company limited by guarantee is better for organisations that are run for the benefit of other people or the community. Charities and other non-profit enterprises tend to use this structure because there are no shares or shareholders. The owners generally use surplus income to further the aims of the business, rather than taking profits for themselves.

a year ago
 

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