Explain the main differences between a Sole Trader, a Limited Company and a Public Limited Company, in terms of accounting and reporting requirements

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Explain the main differences between a Sole Trader, a Limited Company and a Public Limited Company, in terms of accounting and reporting requirements.

Businesses can be classified by two types in general - Unincorporated firms and Incorporated firms.

An unincorporated firm is one that is not registered with Companies House, who are the government registrar of companies, as a business and there are two main types - sole trader and partnership. A sole trader is the simplest form of business type. It is the business which is owned by only one person. Partnership is, in essence, like a sole trader but with the ownership shared between partners who can 2 or more.

An incorporated firm is a firm that a registered firm at Companies House. In this category, there are two types - a private limited firm and a public limited firm. A private limited company is one where the liability is limited. To form and run a limited company it needs 1 or more owners and shareholders, who own at least one share each, and it has to file Memorandum & Articles of Association and prepare annual accounts which are that the company should summit to