Form a Limited Company
Many business start-ups and sole traders choose to form a limited company due to their many benefits. However if you choose to form a limited company, there are many considerations that need to be thought out carefully.
What is a Limited Company?
There are two types of limited companies - public limited companies and privately owned limited companies. Public limited companies trade their shares publicly on the stock market.The term limited refers to the company's limited liability status and a limited company is a legal entity in its own right and therefore separate from the company's director. This means that the company's officers and shareholders are not held personally responsible for the company and unlike unincorporated companies, their personal assets are not used to meet any outstanding debts.
Form a Limited Company - Advantages
There are many advantages to form a limited company - especially if you are a sole trader or partnership. These include:
- The main advantage when you form a limited company is the limited liability status of the company. This means that in the unfortunate event of the company winding up or going into receivership, the company officers' and shareholders' own personal assets are not at risk - as long as the company has operated legally and within the terms of the Companies Act.
- When you form a limited company, the first £10 000 of the the company's profits are tax free
- Potential customers and suppliers are more confident in a limited company. Some larger companies will not trade with unincorporated companies.
- A limited company's name is protected - this means that no two limited companies can have the same name. Many limited companies will form a limited company so that they may protect a name for future use.
How to Form a Limited Company
There are three things that need to be set up before you can form a limited company, these are:
- You must make payment to Companies House who is the registration company for UK limited companies.
- To form a limited company, you will also need to decide on a business name and check that it is not already registered and meet with the regulations for a company name.
- You will also need have a UK address - the registered address for the company. This address is where the company will keep official documentation , receive official correspondence and where court documents can be served.
Form a Limited Company Online
checkSURE, the instant online Credit Report company have teamed up with the SCF Group - the largest independant team of tax advisers in Europe to bring you startingmybusiness. From only £55 + vat and P+P you can reduce the time and stress associated with incorporating your company yourself and form a limited company online with startingmybusiness. You can then enjoy the many advantages of such a straightforward service and receive a free checkSURE Keep it Live Report, just click here for further details.
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