The structure of your business is a very important decision and advice must be taken to ensure that your chosen vehicle suits your needs now and in the future.
The business itself may well determine the form it takes: sole trader, partnership, limited company or limited liability partnership.
Owners withdrawing their profits in the form of dividends from a small company (excluding personal service company's) will suffer tax at the rate of 21%. This will usually be more tax-efficient compared with drawing remuneration as this is liable to employer's and employee's national insurance contributions. Otherwise, a company has considerable flexibility on how profits can be extracted. In addition, a number of reliefs have been introduced over the last few years only available to companies.
However, companies generally have higher administration costs, and of course your accounts will be available for everyone to see.