Jargon Busters: Artists and Makers Business Types

Jargon Buster for Artists' Business Types

Photo by Rahul Pandit

The Three Types of Business in the UK

Artist and Makers Business Jargon Busters is a short introduction to the main types of businesses run by artists and makers in the UK. For more detail see

Sole trader (Self-employed)

If you’re an individual, and run your own business, you can register as a sole trader. This means you can keep all your business’ profits after you’ve paid tax on them. You’re personally responsible for any losses your business makes.

HMRC offers a calculator to help you budget for your tax payments as a sole trader. They also provide a  how to set up as a sole trader info sheet.

A limited company

Limited companies often operate under a trading name which is usually the name of the business.

A limited company can be classified as limited by shares or limited by guarantee.

A limited by shares company usually operates for the purposes of turning a profit, has shares and shareholders and can keep any profits it generates after paying tax.

NOTE: You can be the only shareholder!

A limited by guarantee company has guarantors rather than shareholders and invests profits back into the company. These organisations are commonly known as ‘not for profit’.  NOTE: Community Interest Companies are also seen as ‘not for profit’ companies.

HMRC guidance on how to set up a limited company provides you with a step-by -step guide online of how to do this.

Image from an ArtMakers Virtual Exhibition

Community Interest Companies (CICs)

A CIC is a special type of limited company which exists to benefit the community rather than private shareholders.

To set up a CIC, you’ll need:

  • a ‘community interest statement’, explaining what your business plans to do
  • an ‘asset lock’- a legal promise states that the company’s assets will only be used for its social objectives, and setting limits to the money it can pay to shareholders
  • a constitution – you can use the CIC regulator’s model constitutions
  • to get your company approved by the community interest company regulator.Note: your application is automatically be sent to them

The CIC regulator has guidance on setting up a CIC.  This is the more complex form of business registration noted so far. However, it may work for you if you are a collective focussed on benefiting a particular group of people or a community.

This is the overview – find more detail in the ArtMakers information sheets noted above.

If you want more detailed information on all these topics and examples of worksheets on running a marketing campaign etc and templates as to help with business plans etc please register with Artmakers.

Photo by Ritesh Arya





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