Legal structure
Understanding your options when setting up a business entity.
Updated 12 June 2024
Introduction
As a small producer you have three main options regarding the structure of your business. You could set up as a sole trader, a partnership or as a limited company.
Sole trader
Setting up as a sole trader can be advantageous if you are planning a fairly small operation that will be run alone with no employees.
Partnership
Many farms are run as partnerships or two (or more) members of the family. In this case, the partnership makes its own tax return, while individual members of the partnership have to include their partnership earnings (based on their share in the partnership) in their personal tax return. More on tax and partnerships here.
Limited company
A limited company is generally better suited for a larger or more complicated operation that employs staff. There are many pros and cons to each of these options and it is important to fully understand them before making a decision.
Is it right for you?
The two government websites below have a “Check if this is right for you” section that should help better inform you of the options: