Advantages of a limited company

Obviously, the main attraction of forming a limited company is the “limited liability” of its owners, the shareholders, as it protects the personal assets of the owners.  Should the company fail, the company is liable without limit for its own debts, but its shareholders’ liability is limited to the amount oustanding (if any) on their shares.

Limited companies can instil added confidence in suppliers and creditors, many large organisations will only do business with limited companies.

It protects your company name.  Once you have incorporated your company, no one else can form a limited company with the same name.

There are tax benefits to forming a company.  As a director, the tax on dividend income is generally lower than the tax & NI burden if you were employed on an equivalent salary.

 Additional capital can be raised by selling shares in the company.   Ownership of the company can be transferred by selling or transferring shares in the company;  a change in the owners is not a change in the company itself.

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