What do we mean by the words 'small business'. The official definition of a 'limited small company' is to meet two of the following:

• annual turnover must be £5,600,000 or less;
• the balance sheet total must be £2,800,000 or less;
• the average number of employees must be 50 or fewer.

Whilst we are here, to be a medium-sized company, at least two of the following conditions must be met:

• annual turnover must be £22,800,000 or less;
• the balance sheet total must be £11,400,000 or less;
• the average number of employees must be 250 or fewer.

A 'small business' can be a limited small company or a non-limited company that has a sole-trader or partner as the proprietor/s. With sole traders and partners the total profits and wages earned bythe business are taxed on a personal basis - if there are two sole traders in a business who have 50% ownership each, they will each have to pay 50% of the tax burden.

A partnership (usually, but not solely, a professional practice) can have one or more partners. A Partnership Agreement is nearly always used to set the ground rules, and always used by professional partnerships. A new Limited Partnership will allow limited liability for partners (is that a good or bad thing?)

For a full listing of articles on BizHelp24 visit our sitemap

For a full listing of articles on BizHelp24 visit our sitemap