Business Model for Architecture Practices
Most architecture practices follow the traditional, commonly used business structures to operate there practices, which are:
A sole trader, also known as sole proprietor, is an individual who runs their own business and is able to keep all business profits – following paying tax on them. Once anyone starts working for himself or herself, they are considered a sole-trader, and must inform HM Revenue and Customs (HMRC).
Limited Company (Ltd)
This is a company whose owners are legally responsible for its debts to the extent of the amount of capital invested. The main point here is that the company finances are completely separate to the personal finances of its owners, and therefore, any debts owed by the company, cannot be recovered through the personal assets of the company owners. Limited companies are one of the most popular in the country for this reason.
Limited Liability Partnership (LLP)
A Limited Liability Partnership (LLP) is a partnership where some or all partners have limited liability. This means that one partner is not responsible for another partners negligence or misconduct. All profits and losses are shared between the partners and each partner pays tax on their share of the profits. In this structure, the partners are not personally liable for debts and their liability is only limited to the amount of money they invest in the business.
As mentioned, the above are the traditional formal business models/structures most professional organisation take. There are, however, new forms within these springing up in the architectural profession, still under these typical structures but with a bit more nimbleness and flexibility. .
Collectives are becoming more popular as more architects look to lean on and collaborate with each other and other disciplines. Examples include Collective Works, Collective Architecture and Assemble…..