Business formation and structuring solicitors in Scotland

Why your structure matters

The structure you choose affects how your business is taxed, who is liable for its debts, what you must file publicly and how easy it is to bring in investors or sell later. Getting it right at the start is far cheaper than restructuring once the business is trading.

We take time to understand what you want from the business: how fast you expect it to grow, whether you are working alone or with others, how much risk you are taking on and what your plans are for the future. We work alongside your accountant so the legal structure and the tax position fit together.

The main business structures in Scotland

Each structure suits a different kind of business. These are the options we most often advise on.

• Sole traderSimple to start and run, with few formalities. You and the business are the same in law, so you are personally liable for all business debts.
• PartnershipTwo or more people in business together. In Scotland a partnership is a legal person in its own right, but the partners remain personally liable for its debts. A written partnership agreement is essential.
• Limited partnershipAt least one general partner with unlimited liability and one or more limited partners whose liability is capped at their contribution. Often used for investment and property ventures.
• Limited liability partnership (LLP)Combines the flexibility of a partnership with limited liability for its members. Common for professional practices.
• Private limited companyA separate legal entity owned by shareholders and run by directors. A shareholder’s liability is generally limited to any amount unpaid on their shares, and a company is often the best vehicle for growth, investment and an eventual sale.

Setting up a limited company properly

Incorporating a company online can take minutes, but a company formed on default terms often stores up problems for later. We make sure the company is set up to match how you actually intend to run it.

• Choosing and checking the company name
• A Scottish registered office address
• A registered email address for Companies House
• Tailored articles of association
• Share classes and who holds what
• Director appointments and identity verification
• Registers, including people with significant control
• A shareholders’ agreement between the owners
• Service agreements for working directors
• The lawful purpose statement on incorporation

Since 4 March 2024, every company must have an appropriate registered office address and a registered email address, and the people forming a new company must confirm it is being formed for a lawful purpose. Since 18 November 2025, identity verification with Companies House has been a legal requirement for directors and people with significant control. New directors need to verify before they are appointed, so it is worth building this into your timetable.

Structuring for growth, investment and exit

Structuring is not only for new businesses. As a business grows, the original set-up can stop working. We advise on changes such as:

• Incorporating an existing businessMoving a sole trader or partnership business into a new company, including contracts, employees, leases and assets.
• Holding company structuresSeparating trading risk from valuable assets such as property or intellectual property.
• Different classes of sharesGiving flexibility over voting, dividends and capital for founders, family members and investors.
• Bringing in new ownersIssuing shares to investors or key staff, with the right protections for everyone.

If you are thinking about selling in future, the structure you choose now can make a real difference to how smoothly that sale goes and how the proceeds are taxed.