The pros and cons of operating through a limited company

Benefits

• Minimising personal liability
• Professional status
• Tax efficiency and planning
• Higher personal remuneration
• Separate legal identity
• Credibility and trust
• Investment and lending opportunities
• Protecting a company name
• Pension
• Splitting income

Disadvantages

• Must be officially incorporated at Companies House.
• Required to pay a registration fee to Companies House to incorporate.
• Company name is subject to certain restrictions.
• Not suitable for undischarged bankrupts or disqualified directors.
• Required to disclose personal and corporate information on public record.
• More complex and time-consuming accounting requirements.
• May need to appoint an accountant to help you with your tax affairs.
• Strict procedures for withdrawing money from the business.
• A confirmation statement and annual accounts must be filed at Companies House each year.
• Must send a Company Tax Return and annual accounts to HMRC every year.
• Must adhere to strict record-keeping requirements, including taking minutes of meetings and recording all decisions taken by directors and shareholders.
• Number of company registers and records must be maintained and made available for public inspection at your registered office.
• If you make any changes to your company details, you must notify Companies House immediately.