Task 2: Types of business in the UK

Investigate and identify the various types of business in the UK:

- Sole traders

This is a business type common among people who are first starting up their business. This involves running it as an individual, becoming self-employed as a result, allowing you to keep all profits made for yourself (once tax has been paid on them of course). On the other end of this however, you will also become personally responsible for any losses that may be made from the business.

- Limited companies
If a business is formed as a Limited Company (often indicated by an 'Ltd.' in a name), the finances of said enterprise are separated from the personal finances of those involved as a result. However, this does come with more managing an reporting responsibilities when compared to some other business types. Some people, due to this, decide to get a professional, such as an accountant, to help them out with these parts of the business, but a company of this form can still be set up solo.

- Partnerships
A partnership is quite similar to being a Sole Trader, except that the business is instead owned by at least two people (or potentially more) instead of just one. In this type of situation, a contract known as a 'Deed of partnership' is often drawn up, stating the type of partnership, how losses and profits will be shared amongst those involved, and how much capital each party contributes. Partnerships can also sometimes have someone involved known as a 'sleeping partner', investing in the business but not directly running it like the other members of the partnership are expected to. 

- Social enterprises
If a business is considered to have a 'social mission' as what they do, it may be considered as a 'social enterprise'. Similar to a charity, businesses like this aim to make profits in order to reinvest or donate what they have made to create a positive social change in the world; whether this be to help people or the planet as a whole, these enterprises trade in order to fight social issues, help & improve communities and people's chance in life or environmental issues. This type of business has six different sub-models which fit into this business type: Charitable Trusts, Charity Limited by Guarantees, Charitable Incorporated Organisations, Co-operatives, Community Interest Companies (or CICs), and Community Benefit Societies,

- Charities (Charitable Trusts)

In order to be legally and officially classed as a valid charitable trust, the business must demonstrate this is accurate by showing both a benefit to the public, and a charitable purpose. Organisations that possess this 'charitable' status are not allowed to use any assets of theirs for any purposes that do not fit into a pursuit towards a charitable objective - charity assets are NEVER to be used for private benefit. These types of organisations ae widely recognised to be in existence for the purpose of creating social good, such as assisting with fundraising for example, with important business contacts like suppliers, banks. lenders and funders all being very familiar with the concept of a charitable business. 

- Unincorporated associations

This refers to an organisation which has been set up through an agreement between a group of people coming together for a  reason which is not to make a profit, such as a volunteer group or a sports club for example. In order to become an unincorporated association, no registering of any kind of needed and it doesn’t cost anything to set up. Individual members of these types of associations are each  personally responsible for any debts and/or contractual obligations that may come about as a result, and if the association does begin making a profit or trading, everyone involved would be required to pay 'Corporation Tax' and file a 'Company Tax Return' in the same way a limited company would.

References:

Site 1 - https://theartsdevelopmentcompany.org.uk/resources/what-is-the-best-business-model-for-my-social-enterprise/

Site 2 - https://l4creativeenterprise.blogspot.com/2019/10/set-up-business-govuk.html