Deciding if a limited company is the right structure for your business can be challenging. To help you make the best decision, here are ten compelling reasons to consider forming a limited company – from protection of assets and minimizing tax liabilities to creating a public image and ensuring credibility.
Limited Liability
One of the biggest advantages of forming a limited company is the protection against any potential financial risks associated with your business decisions. Limited liability means that, as the owner of a limited company, you are protected from any losses your business may incur and you are not personally responsible for them. This protection can be invaluable in limiting your exposure to financial risks and ensuring the stability of your business.
Taxation Advantages
If you run your business as a limited company, then you will benefit from the lower Corporation Tax rate. This makes it an attractive option for businesses who have a large turnover of profits since the company pays a lower percentage as compared to personal income tax for sole traders or traditional partnerships. Your business will also be eligible for other tax relief options such as transferring losses into other years.
Improved Credibility
Forming a limited company gives your business an extra layer of credibility. Many customers and clients will view it as being more mature and authoritative than a sole trader or partnership. Furthermore, you will be able to bid for larger contracts and attract bigger investors which could help accelerate the growth of your business.
Separate Personal Finances
With a limited company, you can separate your personal expenses from your business. You won’t need to declare any of the income generated by your limited company in your annual tax return, as it will already have already been declared for taxation purposes. This effectively means keeping track of all expenses associated with the running of the business is much simpler, allowing you to focus on generating profit instead.
Retain Control & Flexibility
As a limited company, you can set your own rules and make decisions without consulting a board of directors or other shareholders. This offers a high level of control and flexibility, while still keeping the operations of your business separate from your personal accounts. Moreover, having incorporated status allows you to protect your personal assets from any business debts incurred by the limited company.
How do I make my business limited?
If you are interested in making your business limited give us a call today at the number below and a member of our experienced team can help you through the process.