Limited Company

Have you considered how you might like to trade. The simplest options are as a sole trader or as a partnership, however for added security from creditors and scaleability a limited company might be a better option.

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.

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