Legal Formalities in Business Structures

Steps:

• Identify the question: Compare ease of establishment and legal requirements across business types.
• Recall definitions: Sole trader is simplest; partnership needs basic agreement; limited company requires formal registration; club/society is informal.
• Evaluate difficulty: Limited companies involve extensive paperwork, fees, and compliance with company law.
• Select option: C fits due to highest legal hurdles.

Why C is correct:

• Under the Companies Act 2006, limited companies must register with Companies House, file articles of association, memorandum, and annual returns, ensuring separation of ownership and liability.

Why the others are wrong:

• A. Partnership: Requires only a partnership agreement, no public registration or complex filings.
• B. Sole trader: Involves minimal setup, like registering for tax, with no separate legal entity.
• D. Club or society: Operates informally under basic rules, without mandatory legal incorporation for non-profits.

Final answer: C