Advantages of a Limited Company

UK Key Points

Time – just one day to integrate your business Directors – a director is needed.
Shareholders – at the least one
Corporate shareholders are permitted
Share Capital – you will find no minimum share capital requirements
Support – using our experience we steer you throughout each step of the company formation process

Limited Liability – what does it truly mean?

The primary advantage of trading as a small business has invariably been the limited liability of the company’s shareholders & officers. As a sole trader or any other non-limited business, personal property may be in danger in the function of a failure on the company, but this is not true for a small business.

So long as the company is operated legally & within the conditions of the Companies Act, the private property of directors or maybe shareholders aren’t in danger in the function associated with a winding up or even receivership.

Operating as a small company typically gives vendors and customers a feeling of confidence in a company. Larger companies in particular will choose not to cope with non limited businesses. Additionally, a lot of the expenses related to managing and operating a small business are not a lot more than having a non limited business.

There’s absolutely no obligation for a small business to commence trading within any set period of time after its incorporation. It means that the development associated with a small business is one easy and affordable technique to safeguard a business name. Whilst this doesn’t in itself give some rights to use of the company name, many clients include companies in fear of potential development of new companies or to be able to defend the limited business title of a current non limited businesses of the future.

Directors pay the company and income tax pays corporation tax on business profits. With the present tax rates, business profits earned and held on to in the company are evaluated to corporation tax at lower prices than if income tax have been payable on equivalent income earned by an unincorporated business. If a small business becomes insolvent and it is wound up, just the assets of the organization are utilized to attempt to clean its debts. The officers of the business have no private liabilities, aren’t created bankrupt and may freely include another company. The shareholders are likely and then the degree of any unpaid shares held.

An undischarged bankrupt is forbidden in order to begin another company or even to be a director of a small business.
Maximising the advantages of a small Company
Tax Benefits

Making sure that your business makes pension contributions.
Guaranteeing you claim the highest possible expenses allowable under legislation.
Ensuring that capital equipment utilized in your company is obtained by you which capital allowances are claimed.
Ensuring that benefits in kind (insurance, healthcare etc.) are paid from the company

Other considerations are:

There are a variety of other tax benefits for a limited business.
Frequently it’s doable to lower the Corporation Tax, with very careful planning, by creating dividend payments to the shareholders of its, and also by the usage of a business Pension Scheme.
The organization has a legal existence separate from its management and the people of its (the shareholders)
People have limited liability
The company’s name is protected
It’s flexible borrowing powers
The company goes on despite the death, bankruptcy or maybe resignation of members and management
The responsibilities and interests of management are defined
Appointment, removal or retirement of directors is straightforward
It’s simple to procure new investors and shareholders
Employees are able to get shares