Benefits of Setting Up a Limited Company
Exploring the main benefits of setting up a limited company
There are many reasons why limited companies are amongst the most popular choices for various businesses. If you’re still wondering about it, here are some of the best advantages of setting up a ltd.
Separate Entity and Limited Liability
Since it has a separate legal identity, a ltd is independent of any directors or shareholders. Because of this, among the most well-known benefits is limited liability that provides you personal financial security. Whatever troubles the company goes through, it is in charge of its own debts, so your personal assets are safe. Separate identity also allows the company to be sold at any time since it’s not affected by changing shareholders.
With limited companies, you can enjoy the advantage of lower taxation because it is only applied to the profits. You can also get a part of your salary in dividends, which reduces your Income Tax and National Insurance costs. Moreover, there are many additional tax free benefits for business related matters that you can help you save on expenses.
Status and perception can have a lot of impact on the success of your business. Becoming ‘limited’ is a way for you to give off a more professional vibe to clients and business partners. Due to the higher requirements and monitoring procedures, you’re able to increase the professional image and credibility of your company.
Security and Protection
You are provided a substantial amount of security when it comes to limited companies. Along with being favoured by the banks, your investors also feel safer compared to other types of businesses. Your company name is also protected by the law, so no one can rip off the success of your business.
To sum-up, if you don’t mind additional responsibilities of managing a company, going ‘limited’ is beneficial for your business. So, unlike other business types, you can enjoy financial security, lower taxes, security and higher status in the business world.
In view of the legal, technical and practical difficulties involved in dealing with setting up a ltd company, it is highly advisable to seek the assistance of a business lawyer, at a very early stage, possibly before signing any document. Any mistakes, in the long run, might compromise your business and therefore create several damages. Moreover, there is not only a limited company to fit your needs. You should always select a legal structure of a business which is compatible with your target market.