We each decided to read up into the different types of businesses and decide which we think would be most appropriate for our own business.
A partnership business is when each business partner shares responsibility personally for the business. Each partner would pay tax on their own share of the profits.
The nominated partner would have to sent a partnership Self Assessment tax return every year. All partners must send a personal Self Assessment tax return every year, pay income tax on their share of the partnership's profits and also pay national insurance tax. The partnership would have to register for VAT if it is expected that the business would be taking more than 82,000 a year.
A Limited Company.
A limited company is an organisation that is responsible in its own right for everything it does and its finances are separate to the members personal finances. Any profit it makes is owned by the company after it pays corporation tax. The company can then share its profits. Directors are responsible for running the company - they often own shares, but don't have to.
A co-operative business is a member-owned business structure with at least five members, all of whom have equal voting rights regardless of their level of involvement or investment. All members are expected to help run the business.
As a group, we decided that it would be most beneficial for every member if the business would be a limited company. We chose this as it has a safety net, as if the business (God forbid) were to fail, then at least our own personal finances wouldn't be caught up and lost. It also means that loan sharks cannot come to owners properties and take belongings.