Business Structure

When starting a business in the UK, it’s important to choose the right business structure. The two main types of business structures are corporations and cooperatives. In this article, we will explore the pros and cons of both business structures in the UK.


A corporation is a legal entity that is separate from its owners. It can enter into contracts, own property, and sue or be sued in its own name. There are several types of corporations in the UK, including limited liability companies (LLCs) and public limited companies (PLCs).

Pros of Corporations

  1. Limited liability – One of the primary advantages of corporations is limited liability. This means that the owners of the corporation are not personally liable for the debts and obligations of the business.
  2. Access to capital – Corporations can raise capital by issuing shares of stock. This can make it easier to raise large amounts of capital for expansion or investment.
  3. Credibility – Corporations are viewed as more credible and professional than other types of business structures. This can help to attract customers, investors, and suppliers.
  4. Perpetual existence – Corporations have perpetual existence, meaning that the business can continue even if the owners change.

Cons of Corporations

  1. Cost – Setting up and maintaining a corporation can be expensive, including legal and accounting fees.
  2. Regulation – Corporations are subject to more regulation than other types of business structures. This can include filing annual reports, holding annual meetings, and complying with various legal requirements.
  3. Complexity – Corporations can be more complex to manage than other types of business structures, due to the legal requirements and governance structure.


A cooperative is a business owned and controlled by its members, who share in the profits and decision-making. There are several types of cooperatives in the UK, including worker cooperatives, consumer cooperatives, and housing cooperatives.

Pros of Cooperatives

  1. Shared ownership – In a cooperative, the members have shared ownership and control over the business. This can promote a sense of community and shared values.
  2. Democratic decision-making – Cooperatives are typically governed by democratic decision-making processes, where each member has an equal vote. This can promote a sense of equality and fairness among the members.
  3. Social responsibility – Cooperatives are often focused on social responsibility and community development. This can help to build a positive reputation and attract customers who share these values.
  4. Tax benefits – Cooperatives are eligible for tax benefits in the UK, including reduced corporation tax rates and exemption from certain taxes.

Cons of Cooperatives

  1. Limited access to capital – Cooperatives may have limited access to capital, as they cannot issue shares of stock to raise funds.
  2. Limited liability – Members of a cooperative may have limited liability, but this depends on the specific legal structure of the cooperative.
  3. Limited scalability – Cooperatives may be limited in their ability to scale up or expand, due to the shared ownership and decision-making structure.

Also Read : Outsourced Accounting vs. In-House Accounting


In conclusion, corporations and cooperatives are two different business structures in the UK, each with their own set of advantages and disadvantages. Corporations offer limited liability, access to capital, credibility, and perpetual existence, but can be expensive, regulated, and complex. Cooperatives offer shared ownership, democratic decision-making, social responsibility, and tax benefits, but can have limited access to capital, limited liability, and limited scalability. Ultimately, the choice between corporations and cooperatives will depend on the goals, values, and resources of the business.