Side-by-side comparison

Four structures - very different responsibilities.

This comparison describes the broad position. Agreements, ownership, activities and individual circumstances can change the detail.

Question	Sole trader	Ordinary partnership	Limited company	LLP
Who can use it?	One individual.	Two or more partners.	One or more shareholders, with one or more directors.	Two or more members.
Separate legal body?	No.	Generally no separate legal personality in England and Wales. Scottish partnerships differ.	Yes - the company is separate from its owners and directors.	Yes - the LLP is a body corporate.
Business debts	The individual is personally responsible.	Partners personally share responsibility in an ordinary partnership.	Shareholder liability is generally limited, but directors’ conduct and guarantees still matter.	Members generally have limited liability, subject to the law, agreements and conduct.
How profits are taxed	The individual pays Income Tax and relevant National Insurance on taxable profits.	Each partner is taxed on their share of partnership profits.	The company pays Corporation Tax. Individuals may also be taxed on salary, benefits, dividends or other withdrawals.	Members are normally taxed on their shares of LLP profits.
Taking money	Drawings do not themselves determine taxable profit.	Drawings are governed by the partnership arrangements; partners are taxed on profit shares.	Company money is not automatically the owner’s money. Salary, dividends, expenses and directors’ loans have separate rules.	Members’ drawings and profit allocations should follow the LLP agreement and tax treatment.
Main returns	Self Assessment and possibly MTD for Income Tax.	Partnership return plus individual partners’ returns; MTD consequences require checking.	Company accounts, Corporation Tax return and relevant payroll or personal returns.	Companies House accounts plus partnership and member tax reporting.
Public filing	No Companies House accounts.	Ordinary partnerships generally do not file public accounts merely because they are partnerships.	Companies House registration and public filings.	Companies House registration and public filings.
Written agreement	Not applicable to ownership, though contracts and terms remain important.	Strongly advisable to document profit shares, authority, exits, disputes and ownership.	Articles, shareholder decisions and often a shareholder agreement.	An LLP agreement should govern members’ rights, responsibilities and profit sharing.
Changing later	Can transfer into another structure, but tax, VAT, assets and contracts need review.	Changes in partners or incorporation require planning.	Extracting or transferring a company business can be complex.	Changes in members or conversion require legal and tax planning.

Sole trader

The simplest single-owner structure, with personal responsibility for the business.

Ordinary partnership

Joint ownership and shared responsibility, with each partner taxed on their profit share.

Limited company

A separate legal entity with formal governance, accounts and tax responsibilities.

LLP

A separate legal body for two or more members, normally taxed in a partnership-style way.

Tax rates are intentionally absent from this table. They change, and the meaningful comparison depends on profit, other income, withdrawals, benefits, pension planning and future intentions. Do not select a legal structure from a headline tax rate.