It is important to find what kind of structure will work best for you and your business.
A sole trader is a self-employed person who is the sole owner of their business. It's the simplest and most popular type of business. Being a sole trader means there's less paperwork but it means you are personally liable for any debts.
A limited company has shareholders and is run by directors. Limited liability means you are protected if your business owes money. Taxes can be lower for limited companies.
If more than one of you want to set up in business together its common to set up as a partnership
You can find out more about business structures
Your other option is a Social Enterprise
A social enterprise reinvests any profits back into the business or community, rather than maximising profit for shareholders or owners. They are all about bringing about social change or supporting a community.
Find out more about them on the Social Business Wales site
A social enterprise is a business with social objectives. Profits are reinvested in the business or the community, instead of being diverted to shareholders and owners.
Social enterprises are often best placed to tackle a wide range of social and environmental issues and can often be found in some of the most deprived communities. Many compete in the marketplace like other businesses, using their business skills to achieve social aims. Like other businesses, social enterprises must sustain their business and make profits. The difference is the amount of profit that must be made and what is done with the profit.
Social enterprises come in all shapes and sizes. They are in our local communities and you will find many your high street from coffee shops and furniture makers, to pubs and leisure centers, banks and bakers. If you have ever bought the Big Issue or shopped at the Co-op then you already know what a social enterprise can look like. They are businesses which aim to change the world for the better by helping tackle social problems, improve communities, increase people’s life chances, or help the environment. They make their money from selling goods and services as do all businesses, but they reinvest their profits back into the business or the local community.
If you are the type of your person who is always thinking of innovative solutions to solve social problems in your community for example, then you are a social entrepreneur. To find out more and links to help you explore social enterprise, read the guide on the Business Wales website on Social Enterprise support (Business Wales website)