There are different business legal structures that you can follow if you want to set up a fashion label. By understanding these unique options, you can find the advantages and disadvantages that they can offer you when you start the business.

Sole Trader

This has got to be the simplest way to start and run the business. There are no registration fees required. Books and records are managed in a straightforward fashion and of course, you are the boss. You can have the profits all by yourself. Sadly, of course, in case of debt, it is you who will be directly affected by the debt. Therefore, if the fashion business you are planning requires a lot of external investments, then it might not be a practical option.


If there are other people very much interested in setting up similar businesses, a partnership might be your best option. It is flexible and simple to setup as well. When it comes to cost, since there is more than 1 person, you can share the cost for funding the business. As partners, you will be sharing decisions and liabilities. An agreement should be reached in order to benefit the business. Partnerships are very prominent in the fashion business especially with young designers since it also is also a great challenge to mix and complement each other’s creative differences.

Limited liability partnership

LLP is quite similar to your regular partnerships but the main difference is that the liability is only limited to the amount of money that the individuals invested into the company. If someone is a passive or silent partner, then this is a good option since they can be not involved in the decision making process.

Limited liability Company

LLC is the most common in the UK fashion brands. It is a company that exists in its own right and the finances are actually separated between the owners of the business. They are also called shareholders. They come in numerous forms including private limited companies, public limited companies and private unlimited companies. To become recognized, the business must be registered or incorporated.