{"id":163448,"date":"2024-02-15T21:10:21","date_gmt":"2024-02-15T21:10:21","guid":{"rendered":"http:\/\/chrisw92.sg-host.com\/?p=163448"},"modified":"2024-04-17T11:32:17","modified_gmt":"2024-04-17T10:32:17","slug":"business-vs-company","status":"publish","type":"post","link":"https:\/\/realbusiness.co.uk\/business-vs-company","title":{"rendered":"Business vs Company"},"content":{"rendered":"<div class='booster-block booster-read-block'><\/div><p><strong>For many, the terms &#8220;business&#8221; and &#8220;company&#8221; are used interchangeably in everyday conversation. This is understandable &#8211; both have many similarities, such as their commercial activities that provide goods and services, and both can exist at the same time.<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">But as far as legal and operational structures, distinctions between the two are worth knowing if you operate on the higher ends of either a business, a company, or any organisation that works with them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The following article will provide a clear distinction between the two, by outlining and comparing them directly.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_74 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-685110b97036c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-685110b97036c\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#What_Is_A_Business\" >What Is A Business?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#What_Is_A_Company\" >What Is A Company?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Limited_Company\" >Limited Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Limited_Liability_Partnerships\" >Limited Liability Partnerships<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Royal_Charter\" >Royal Charter<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Community_Interest_Company\" >Community Interest Company<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Key_Differences_Between_Businesses_And_Companies\" >Key Differences Between Businesses And Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Turning_A_Business_Entity_Into_A_Company\" >Turning A Business Entity Into A Company<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Why_Would_A_Business_Entity_Not_Become_Incorporated\" >Why Would A Business Entity Not Become Incorporated?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Pros_And_Cons_Of_Trading_As_A_Business\" >Pros And Cons Of Trading As A Business<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Pros\" >Pros<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Cons\" >Cons<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Pros_And_Cons_Of_Trading_As_A_Company\" >Pros And Cons Of Trading As A Company<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Pros-2\" >Pros<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Cons-2\" >Cons<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/realbusiness.co.uk\/business-vs-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<h2><span class=\"ez-toc-section\" id=\"What_Is_A_Business\"><\/span><b>What Is A Business?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A business is an activity or organisation that engages in the creation, distribution and sale of goods or professional services. This can be anything from a small-scale affair, such as a local handyman, to large, multinational corporations such as Amazon. The goals of business entities differ, with some being non-profit, but most look to generating profit. This profit is not only given to the workers of a business but also stimulates the economy overall through taxation outside of their services.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Two key features:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Ownership and Structure &#8211; <\/b><span style=\"font-weight: 400;\">A business entity can be owned by a single individual, which is called a sole proprietorship, or a group of individuals, which are named partnerships. A business can operate under sole proprietorship freely under the law, but partnerships may have specific outlines of ownership percentages, profit sharing and decision-making.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Legal Liability &#8211; <\/b><span style=\"font-weight: 400;\">The owner(s) are personally liable for all debts and obligations within a business. If a business cannot pay its bills, then creditors are free to come and seize the owners&#8217; assets.<\/span><\/li>\n<\/ul>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-189145 aligncenter lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"http:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1514808596-min-scaled.jpg\" alt=\"Example of a Business\" width=\"697\" height=\"465\" \/><noscript><img decoding=\"async\" class=\"wp-image-189145 aligncenter lazyload\" src=\"http:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1514808596-min-scaled.jpg\" alt=\"Example of a Business\" width=\"697\" height=\"465\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1514808596-min-scaled.jpg 1200w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1514808596-min-300x200.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1514808596-min-1024x683.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1514808596-min-1536x1025.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1514808596-min-2048x1367.jpg 2048w\" sizes=\"(max-width: 697px) 100vw, 697px\" \/><\/noscript><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Is_A_Company\"><\/span><b>What Is A Company?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A company is a separate legal entity that is created through a formal registration process with designated bodies. In the UK, this body is the Companies House. Once registered, a company becomes its legal entity that is distinct from its owners, or the people who manage it (directors). The company can enter into contracts, own assets and property, and incur debts in its name. That being said, being a separate legal entity, its liability is restricted to its assets, whilst its shareholders are protected outside of extreme circumstances, such as misconduct.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A company also has a perpetual existence, meaning that, unlike a business, a company can continue to operate beyond an owner&#8217;s death or departure as usual. For long-term goals, a company may have more worth than a business.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This advantage comes with caveats depending on the type of company you want to establish, however.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Limited_Company\"><\/span><b>Limited Company<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Limited companies are limited liability companies. They are a common type of company structure over the globe, but even these have two subcategories.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Private Limited Company &#8211; <\/b><span style=\"font-weight: 400;\">A private limited company structure holds shares that are not offered to the public. Shares can only be transferred to a small group of investors, and are suitable for a wide range of businesses, with small businesses often opting for them.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Public <\/b>Limited Company &#8211; <a href=\"http:\/\/realbusiness.co.uk\/limited-company-meaning\">A public limited company<\/a> has its shares on the open stock exchange, which it uses to raise capital by reaching a larger pool of investors. However, to become a public limited company, you have to abide by strict regulations and reporting requirements.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Limited_Liability_Partnerships\"><\/span><b>Limited Liability Partnerships<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A limited liability partnership blends traditional partnerships and a limited company. There is flexibility in internal management and profit sharing like a business, but is still a separate legal entity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">LLPs enjoy a &#8220;pass-through&#8221; tax year, meaning the LLP itself doesn&#8217;t pay income tax, but the partnerships do instead. This is split across their individual tax returns. This is a popular option for professional services firms, such as law firms, where partners want protection from each other&#8217;s potential liabilities.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Royal_Charter\"><\/span><b>Royal Charter<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Royal Charter companies are a historic and prestigious designation that can only be given by a reigning monarch. They enjoy degrees of self-regulation alongside their prestigious title.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That being said, a royal charter company is rather rare and is not often given out. They are reserved for organisations that operate in the nation&#8217;s interest, are non-profit, have high ethical standards, or demonstrate a strong track of stability that will be an asset to the country. Big companies such as the BBC and the Royal Mail are both royal charter companies.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Community_Interest_Company\"><\/span><b>Community Interest Company<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">CICs are purpose-driven businesses that focus on benefitting communities through social justice. The key difference between these styles of companies and others is the &#8220;asset lock&#8221;, which means profits are reinvested back into the business to further social aims. This means that shareholders receive limited returns.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">CICs are regulated for community benefit via a dedicated regulator, such as the Office of the Regulator of Community Interest Companies. They are a popular model for social entrepreneurs and organisations that look to make positive impacts whilst functioning as a business.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Key_Differences_Between_Businesses_And_Companies\"><\/span><b>Key Differences Between Businesses And Companies<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Here, we will directly compare the two.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Legal Status &#8211; <\/b><span style=\"font-weight: 400;\">The fundamental distinction between a company and business entities is the legal structure that companies provide. A business owner has legal responsibilities towards their business, but a company owner does not. This separation protects owners and shareholders both.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Taxation &#8211; <\/b><span style=\"font-weight: 400;\">A company&#8217;s tax affairs are different from a business. A business does not pay taxes, but rather, the owner reports its profits and losses on a self-assessment tax return. The owners pay at the end of a tax year as they would on any other income. However, a company, as we&#8217;ve said before, is its own legal entity. A company will file corporation tax returns and pay tax on profits.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Regulations &#8211; <\/b><span style=\"font-weight: 400;\">Companies have stricter reporting and filing requirements than a business entity. You will be required to appoint directors, who are responsible for overseeing the management of the company to ensure it abides by all regulations. This is something many businesses do not have to do.<\/span><\/li>\n<\/ul>\n<h2><img decoding=\"async\" class=\"wp-image-189146 aligncenter lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"http:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1520064782-min-scaled.jpg\" alt=\"Shareholder Meeting\" width=\"918\" height=\"612\" \/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-189146 aligncenter lazyload\" src=\"http:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1520064782-min-scaled.jpg\" alt=\"Shareholder Meeting\" width=\"918\" height=\"612\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1520064782-min-scaled.jpg 1200w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1520064782-min-300x200.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1520064782-min-1024x683.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1520064782-min-1536x1024.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_1520064782-min-2048x1365.jpg 2048w\" sizes=\"(max-width: 918px) 100vw, 918px\" \/><\/noscript><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Turning_A_Business_Entity_Into_A_Company\"><\/span><b>Turning A Business Entity Into A Company<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">To make a business into a company, you have to go through a process known as &#8220;incorporation&#8221;. You will need to create a company name through registration with companies house (in the UK). The overall process is done through specific governments, including a memorandum of association and articles of association. Once the incorporation process is complete, the business becomes a company and its own legal entity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many small to medium-sized enterprises wish to become companies for the legal structure alone. That being said, not all businesses go this route.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Why_Would_A_Business_Entity_Not_Become_Incorporated\"><\/span><b>Why Would A Business Entity Not Become Incorporated?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">There are four main reasons why a business owner may choose not to incorporate:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Costs &#8211; <\/b><span style=\"font-weight: 400;\">Incorporation involves registration fees and an ongoing administrative cost, as well as requiring accounting for the new legal and administration requirements. Small businesses, or businesses with limited budgets and simplistic operations, can view this as a significant barrier, and an unnecessary one, especially for businesses that operate in a low-risk industry.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Control &#8211; <\/b><span style=\"font-weight: 400;\">Sole proprietorships or partnerships have more control over a business than a company. Decision-making is shared within a company, meaning it may not always be in line with the specific goals of a shareholder.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tax Considerations &#8211; <\/b><span style=\"font-weight: 400;\">Businesses can sometimes have a much lower tax burden than a company, depending on the specific jurisdiction or the business&#8217; profit.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Suitability to Business Size &#8211; <\/b><span style=\"font-weight: 400;\">A business can remain small, and be highly profitable. All in all, if a business does not face significant risk, the protection offered by a company may not hold much weight for them.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Pros_And_Cons_Of_Trading_As_A_Business\"><\/span><b>Pros And Cons Of Trading As A Business<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The following section will go over the pros and cons of remaining and trading through a business.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pros\"><\/span><b>Pros<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Simplicity &#8211; <\/b><span style=\"font-weight: 400;\">Sole traders can set up and begin right away. There&#8217;s minimal paperwork required, and soon after it&#8217;s out the way, you&#8217;re ready to begin trade. This is advantageous because it allows you to start developing core business activities right away, like developing your goods or services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Control &#8211; <\/b><span style=\"font-weight: 400;\">Business owners make all the decisions, big or small, without having to answer to a board of directors or consult with partners. This is particularly useful in businesses that require swift decision-making and react to market changes. For individuals with a strong vision for where they want their business to go, this is a fine advantage.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Potential Tax Advantage &#8211; <\/b><span style=\"font-weight: 400;\">Taxes are messy, but depending on your income level, business profit and taxation method, you could potentially reap tax rewards. Nonetheless, remember you must submit a self-assessment <a href=\"http:\/\/realbusiness.co.uk\/how-to-do-a-tax-return-for-a-small-business\">tax return on behalf of the business<\/a>. So it&#8217;s important to ensure your business records are correct and well-compiled.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cons\"><\/span><b>Cons<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Full Liability &#8211; <\/b><span style=\"font-weight: 400;\">The significant difference between companies and businesses will always be the legal entity status. If your business fails and you incur debts you cannot repay easily, then your business may face debts or legal issues and it will come back to you as the business owner.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Difficulty Raising Capital &#8211; <\/b>It can be harder to secure loans or <a href=\"http:\/\/realbusiness.co.uk\/attracting-investors\">attract investors<\/a>, as many will consider the business&#8217;s unprotected status and will require further proof that your business is safe.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Business Continuity &#8211; <\/b><span style=\"font-weight: 400;\">A business ends when the owner passes on, or if you become unable to work, or decide to leave. This can create an uncertain future.<\/span><\/li>\n<\/ul>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-189147 aligncenter lazyload\" style=\"font-size: 16px;\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"http:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2249889569-min-scaled.jpg\" alt=\"Business and Company Conclusion\" width=\"1200\" height=\"461\" \/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-189147 aligncenter lazyload\" style=\"font-size: 16px;\" src=\"http:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2249889569-min-scaled.jpg\" alt=\"Business and Company Conclusion\" width=\"1200\" height=\"461\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2249889569-min-scaled.jpg 1200w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2249889569-min-300x115.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2249889569-min-1024x394.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2249889569-min-1536x590.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2249889569-min-2048x787.jpg 2048w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/noscript><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Pros_And_Cons_Of_Trading_As_A_Company\"><\/span><b>Pros And Cons Of Trading As A Company<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Next, we have the pros and cons of trading as a company.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pros-2\"><\/span><b>Pros<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Limited Liability &#8211; <\/b><span style=\"font-weight: 400;\">Limited liability companies mean that your assets are shielded from most of the company&#8217;s liabilities and legal obligations. A shareholder&#8217;s liability, then, is restricted to what they invest.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Increased Credibility &#8211; <\/b><span style=\"font-weight: 400;\">Operating as a company with a registered company name can enhance your credibility, as you&#8217;ll be operating with lower risks, whilst having more oversight via companies house. Furthermore, the company will continue after the death of its owner, ensuring long-term viability.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Capital Raising &#8211; <\/b><span style=\"font-weight: 400;\">Companies can freely sell shares to investors, issue bonds, and have better access to loans.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cons-2\"><\/span><b>Cons<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Taxation &#8211; <\/b><span style=\"font-weight: 400;\">Companies pay corporation tax, and shareholders may also pay income tax on dividends.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Increased Regulation &#8211; <\/b><span style=\"font-weight: 400;\">Companies must adhere to stricter reporting than businesses.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reduced Control &#8211; <\/b><span style=\"font-weight: 400;\">As we&#8217;ve said, a company may be owned by one or more people, so decision-making is split between several directors and the shareholder&#8217;s agreement.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><b>Conclusion<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">All in all, incorporating into a company comes with protections not available for normal businesses. Compared to a company, a business is a risk, but incorporating into a company means not only accounting for the increased regulations but also losing control.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Whether or not the decision to make the switch is right for you depends entirely on your circumstances. Nonetheless, we hope this article helps you make informed decisions about your business or company&#8217;s future.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>For many, the terms &#8220;business&#8221; and &#8220;company&#8221; are used interchangeably in everyday conversation. This is understandable &#8211; both have many similarities, such as their commercial activities that provide goods and services, and both can exist at the same time. But as far as legal and operational structures, distinctions between the two are worth knowing if [&hellip;]<\/p>\n","protected":false},"author":26234,"featured_media":163449,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[11974],"tags":[2999,12179,11990,12161],"class_list":["post-163448","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-business","tag-company","tag-mar-p","tag-p2024"],"views":23830,"_links":{"self":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/163448","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/users\/26234"}],"replies":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/comments?post=163448"}],"version-history":[{"count":0,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/163448\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media\/163449"}],"wp:attachment":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media?parent=163448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/categories?post=163448"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/tags?post=163448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}