I am an architect. What type of company should I register?

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Hi, all. I’m an architect based near Exeter, and I would like to set up a company and do business here in the UK. What type of company would be best suited for an architectural firm? Does anyone know? In need of some industry insight, if you’ve got any. Thanks.

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The best business structure for you as an architect would be a company limited by shares or a limited liability partnership (LLP). Both structures provide limited liability to their owners and are suitable for businesses that want to distribute profits to their owners, but there are a number of differences between the two:

  • Limited companies can be set up and run by one person or lots of different people; LLPs require a minimum of two partners.
  • Limited companies are owned by shareholders and run by directors (the same person can take on both roles); LLP are owned and run by the partners.
  • Limited companies pay 20% Corporation Tax on profits; LLPs do not pay Corporation Tax because the partners pay Income Tax and National Insurance on the profit they each bring to the business.
  • Limited company directors can reduce their personal tax by taking a small salary and larger dividends.
  • Limited by shares companies can sell shares in the business in return for investment; LLPs cannot offer equity stakes in the business to non-members.
  • Easier to make changes to an LLP’s internal management structure and the way that profits are distributed.

Ideally, you need to sit down with an accountant or professional advisor to discuss your plans and options in more detail; however, many architectural firms do find the LLP structure to be more suitable for their needs. Take a look at this article in the Architects Journal for some industry insight on best practice.

2 years ago
 

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