It can be confusing deciding what type of business to trade through when first starting out, and there are a number of reasons you might find it beneficial to trade through a Limited Company. Put most simply, Limited Companies exist as an entirely separate legal entity from the business owner(s).
This brings many advantages, perhaps the most important of which being limited liability. Limited liability means that the company’s assets are kept entirely separate from the business owners’ personal assets, and so if the company gets into financial difficulty the business owners’ assets will be unaffected (unless personal guarantees have been signed!). So if you have personal assets such as property that you wish to safeguard then this is typically the safest option to choose.
Limited Companies also have a perceived prestige over a Sole Trader or Partnership business. Primarily this is because private and public Limited Companies are the only way that larger businesses will trade. If you are looking to seek investment for your business then a Limited Company will typically be the right option due to the share structure that a company has along with the way a company separates business assets from personal ones.
There are many other considerations to keep in mind when forming a Limited Company such as the legal responsibilities each director has, and that some information on your company will be publicly available via the Companies House website. Talk to one of our team today to find out which option is best suited to you and your business.
The majority of our clients trade through Limited Companies because of the multitude of benefits a company brings versus trading as a Sole Trader or Partnership.
As mentioned above, we are always happy to advise you on whether it would be beneficial for you to incorporate a Limited Company. But even if you have already formed your company and begun trading then we can still review your company structure to see if it is organised in the most tax efficient way, ensuring that you are making the most of the benefits having a company can bring.
Running a company can be time consuming enough without dealing with accounting and tax headaches which is why we take care of everything from the Annual Return to the Corporation Tax Return for our Limited Company clients.