1. The two unincorporated structures are the sole trader and the partnership, and between them they account for most UK businesses.
2. Because there is no legal separation, the money the business owes is money the owner personally owes, which is unlimited liability.

Sole traders

1. Easy and cheap to set up: the owner registers with HMRC and can start trading within days, with low start-up costs.
   1. Greggs started this way in 1939, when John Gregg delivered eggs and yeast to homes around Newcastle by bicycle as a one-man business.
2. Makes all the decisions: one person decides everything, so the business reacts quickly, but there is nobody to share the workload or challenge a bad decision.
3. Keeps all the profit: there are no partners or shareholders to share it with, so every pound of profit after tax belongs to the owner.
4. Flexible working hours: the owner sets their own hours, which is why this structure suits somebody fitting work around family commitments.
5. Privacy: accounts are not published, so competitors cannot look up what the business earns.
6. Limited sources of finance: a sole trader cannot sell shares, so money comes from savings, family, a bank loan, an overdraft or retained profit.
   1. Banks lend cautiously because the business owns few assets to offer as security.
7. Unlimited liability: personal possessions such as the owner's car or home can be sold to pay business debts.
8. No continuity: the business has no legal life of its own, so it ends when the owner retires, sells up or dies.

Partnerships

1. More capital: every partner can invest, so a partnership usually starts with more money than a sole trader could raise alone.
2. Shared workload and expertise: partners bring different specialisms and can cover for each other, so the business can offer more than one person could.
3. Shared control: decisions have to be agreed, which slows them down, and partners who disagree can stall the business with no boss to break the tie.
4. Shared profit: profit is split between the partners, so each owner earns less from the same total than a sole trader would.
5. Unlimited liability, shared: debts run up by one partner can be claimed from the others, which makes choosing a partner a financial decision as much as a personal one.
6. Disrupted continuity: if a partner leaves or dies the partnership normally has to be dissolved and reformed, which can interrupt trading.

What a deed of partnership covers

1. How profits are shared between the partners, and what salary each one takes.
2. How much capital each partner has invested, and how liability is shared.
3. Voting rights, and who decides important matters such as which products to sell.
4. How the workload is divided, and the rules for admitting a new partner or for a partner retiring.
5. A deed is not compulsory, but without one a disagreement over money has nothing to settle it.

Deciding whether to take on a partner

1. Ask first whether the partner brings capital, because a partner who invests money solves a finance problem that a bank loan would otherwise have to solve.
2. A partner who brings no money is a much weaker case, because they take a share of the profit for doing work a paid employee could have done.
3. Weigh the shared workload and specialist skills against slower decisions, possible conflict and the loss of sole control.
4. Then judge it against how profitable the business already is, because giving away half of a healthy profit costs far more than giving away half of a struggling one.