LIMITED COMPANY

A Limited Company functions according to British Company Law, primarily The Companies Act 2006, and has a legal identity of its own, separate from that of its directors and members.

A Limited Company is created by registering in the British register of companies – Companies House.

Advantages

  • Ease of registration. We can have you ready for trading usually within 24 hours, and you’ll be registered for Corporation Tax at the same time.

  • Tax efficient. Corporation tax is currently set at 19% and the UK government has announced it will cut it to 17% for the 2020/21 tax year. Also, if you structure your income from the company as a mix of dividends and salary you can minimise National Insurance and tax liability. There are other tax advantages relating to leaving profits in the company until needed and appointing a spouse or partner as a director.

  • You can draw an interest-free loan from the company to aid cash flow.

  • Risk reduction. As the name implies, liability for debts incurred by the company are limited to the cost of the shares, so long as directors can show that they have always acted legally and in good faith.

  • Other benefits include credibility and prestige; a more concrete structure to aid selling the business in the future; pension contribution advantages; and the ability to raise capital by selling shares.

Disadvantages

  • Setting up the company can be time-consuming if you choose to do it yourself.

  • Limited Companies must submit annual accounts to Companies House and the reporting requirements can seem complex to many people.

  • Your accounts are available for anyone to view at Companies House, so your financial affairs become public.

  • You must adhere to and comply with all relevant Company Law, or you become liable for any debts the company accrues.

On the Right Track

At Sylwia Klocek Accounting we keep our clients on the right track, avoiding trouble with HMRC and maximising income. We take care of the paperwork to leave you to get on with business.