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Business Legal Structure Choice In Jersey | Jersey Business Legal Services | Parslows Jersey
Setting up your new business is exciting and you want to get on and trade as soon as possible, but you need to carefully consider your business legal structure.
Jersey start-ups – The business legal structure you choose will define your legal responsibilities.
Types of business
Most businesses in Jersey are:
- Sole trader
- Limited company
- Standard Business Partnership
A bit more detail about Jersey business legal structure:-
What is a sole trader?
You’re a sole trader if you’re running your own business as an individual. You can keep all your business’ profits after you’ve paid tax on them.
Sole trader means you’re responsible for the business, not that you have to work alone. You can therefore take on staff.
What are you legal responsibilities?
You’re personally responsible for:-
- liabilities and losses your business may incur;
- bills for things you buy for your business, such as stock or equipment;
- keeping accurate records of your business’ sales and spending.
What is a limited company?
A limited company is a separate legal entity that you can set up to run your business.
A company is responsible in its own right for everything it does and its finances are separate to your personal finances.
Any profit it makes is owned by the company. The company can then share its profits by way of dividends.
How do you own a company?
Every limited company has members – people or organisations who own the shares in the company.
Who runs a company?
The company is run by Directors. Directors often own shares, but they don’t have to.
As a director of a limited company, Jersey Companies law says you must:-
- endeavour to make the company a success, using your skills, experience and judgment;
- follow the company’s rules, shown in its articles of association;
- make decisions for the benefit of the company, not yourself;
- tell other shareholders if you might personally benefit from a transaction the company makes;
- keep company records and report changes to the Jersey Financial Services Commission;
- make sure the company’s accounts are a ‘true and fair view’ of the business’ finances.
What are my legal responsibilities?
Most limited companies are ‘limited by shares’.
This means that the shareholders’ responsibilities for the company’s financial liabilities are limited to the value of shares that they own but haven’t paid for.
STANDARD BUSINESS PARTNERSHIP
In a business partnership, you and your business partner (or partners) personally share responsibility for your business.
You can share all your business’ profits between the partners. Each partner pays tax on their share of the profits.
What are my legal responsibilities?
As a business partner you are personally responsible for your share of:
- any losses your business makes;
- bills for things you buy for your business, such as stock or equipment.
What at the partners’ responsibilities?
As a business partner you must:-
- follow the partnership agreement (if you have a formal agreement). You should always ensure you have a partnership agreement to regulate how business decisions are made, how disputes are resolved and how to handle a buyout. You’ll be glad you have this agreement, if for some reason you run into difficulties with one of the partners, or if someone wants out of the arrangement;
- endeavour to make the partnership a success, using your skills, experience and judgment;
- make decisions for the benefit of the partnership.
Jersey Business Legal Services
Carl Parslow | Partner | Jersey Business Legal Services
For advice, assistance or further information please do not hesitate to call 630530 or email us on email@example.com
Parslows Jersey can help
We know that Jersey businesses have to carefully manage their budget. If we consider a client can resolve a matter without the services of one of our lawyers or if we can provide succinct advice in the right direction, we will say so. Whether we’re advising a Jersey start-up company or an established Jersey business, we always start and end with what is in your commercial interest.
Parslows Jersey Business Legal Services team is small enough to care but big enough to trust.
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