Do you need a limited company?
These are some of the reasons why you may choose to incorporate your business:
- Limited Liability
Your personal liability in the case of business failure is limited to the share capital that you have contributed and any personal guarantees that you have given. This protection may not apply in cases of wrongful trading.
Limited companies can be more flexible than partnerships for the division of management, ownership, control and income.
Limited company status can apparently increase the credibility of a business although there is no real reason why this should be so.
- Income Tax Mitigation
The ability to extract income as dividends rather than remuneration's may be tax advantageous
- Capital Gains Mitigation
It is sometimes advantageous to commence a new trade via a limited company in order to set off realised capital gains.
There can however be disadvantages:
- Bank Finance
It is unlikely that you will be able to obtain bank finance at least initially without personally guaranteeing the debt.
- Obtaining Credit
Your suppliers also know about the effect of limited liability and may be more reluctant to grant credit.
- Audit and Accountancy
A limited company is obliged to prepare annual accounts in a statutory format that may be more complicated than individual or partnership accounts. You may need an audit.
A limited company requires more administration as there is a regular requirement for the filing of information.
Directors and employees will receive their remuneration by salary net of tax. There are specific taxes on the provision of Motor Cars for which you will have to prepare forms P11d's in addition to returns of dividends paid. In addition to your personal Income Tax Return the company has to make various tax returns including a Corporation Tax Return.
The factors detailed above are complex and specific professional advice should be obtained before acting on these matters.
If you do want to incorporate your business
We can incorporate a new company for you with your choice of name in a week to ten days. Alternatively we can arrange for a same day incorporation or the purchase of an off the shelf ready made company the same day so that you can be trading without any delay. Our bespoke limited companies usually include the following as standard:
- One class of Share Capital
- £100,000 Authorised Share Capital
- Protection for founder Directors/Shareholders
- "General commercial company" objects clause so your trade is unrestricted
- Certificate of Incorporation
- 5 copies of Morandum and Articles of Association
- Share registers and setting up statutory books and obtaining company seal
We normally complete all of the initial entries in the statutory books for you and make all relevant filings at Companies House.
The total cost for a standard incorporation or off the shelf ready made company is £285 plus VAT (£334.88 inclusive of VAT)
The cost for a same day incorporation is £485 plus VAT (£569.88 inclusive of VAT)
During the life of your company we can help you plan your future and give positive advice for tax mitigation. We can provide a full range of services to ensure your company complies with the relevant statutory requirements and files all relevant documents with government authorities.
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