By
August 25, 2026
What Are the Different UK Company Structures?
When starting a business in the UK, you must choose a legal structure. Your decision affects ownership, personal liability, taxation, reporting obligations and the ways the business can raise money.
The main UK business structures include sole traders, partnerships, limited liability partnerships and limited companies.
A sole trader is an individual who owns and operates a business personally. The business and its owner are not legally separate.
A sole trader:
This structure may suit freelancers, consultants and small businesses with limited financial risk.
A general partnership is formed when two or more people operate a business together and share its profits.
The partners normally:
A written partnership agreement should explain ownership, profit distribution, responsibilities and what happens if a partner leaves.
A limited partnership has at least:
The general partner manages the business and is responsible for its debts. A limited partner normally contributes capital and has liability limited to their investment but cannot take part in management in the same way as a general partner.
Limited partnerships must be registered with Companies House.
A limited liability partnership, or LLP, combines features of a partnership and a limited company.
An LLP:
LLPs are commonly used by professional services businesses and organisations whose owners want partnership-style flexibility.
A private company limited by shares is the most common UK company structure for commercial businesses.
The company:
One person can be the company’s only director and shareholder.
A company limited by guarantee has guarantors instead of shareholders and normally does not issue shares.
Each guarantor promises to contribute an agreed amount if the company is wound up. This amount is often relatively small.
This structure is commonly used for:
Profits are often reinvested in the organisation rather than distributed to its members.
A public limited company, or PLC, can offer its shares to the public, subject to the relevant legal and regulatory requirements.
A PLC has more demanding requirements than a private limited company, including rules concerning:
This structure is generally used by larger businesses seeking significant investment.
An unlimited company is an incorporated company in which members may have unlimited liability if the business cannot pay its debts.
It remains a separate legal entity, but it does not provide the same liability protection as a limited company. Unlimited companies are relatively uncommon and specialist advice should usually be obtained before choosing this structure.
A community interest company, or CIC, is intended for businesses operating for the benefit of a community.
A CIC can be structured as:
It must satisfy a community-interest test and is subject to an asset lock, which limits how its assets and profits can be distributed.
A charity may operate as a company limited by guarantee. It may need to register with Companies House and the appropriate charity regulator.
A charitable company must follow both company law and charity law. Its income and assets must be used for its charitable purposes.
No. “Social enterprise” describes a business with a social, environmental or community purpose, but it is not a separate legal structure.
A social enterprise might operate as:
Your choice should consider:
A private company limited by shares is generally suitable for a commercial business seeking limited liability and the ability to issue shares. A company limited by guarantee may be more appropriate for a non-profit or membership organisation.
Yes, but it may require creating a new legal entity and transferring the business, contracts, assets and registrations.
For example, a sole trader can incorporate a new limited company and transfer the business to it. This may have tax, contractual and administrative consequences, so professional advice may be appropriate.
The main UK company structures are private companies limited by shares, companies limited by guarantee, public limited companies and unlimited companies. Other UK business structures include sole traders, general partnerships, limited partnerships and LLPs.
The right structure depends on ownership, liability, funding, taxation and the long-term purpose of the business.
