Registering with Companies House as a Limited liability company means that company is seen as an entity separate from you. Shareholders and the company are legally distinct as well as their finances. This also means that:
- You aren't personally liable for any debts of the company.
- You get additional tax benefits for company directors.
- It's more tax efficient once you get to a certain level of profit.
- It's seen as more credible and reputable.
- It might be easier to get finance for the company.
- Company registered name cannot be used by anyone else.
However, consider that:
- It's more complex and more expensive to set up and run LTD company. Directors also have more responsibilities.
- There are no tax free allowances, you pay tax on all profit of the company.
- There is less privacy - business details and your personal information are available online.
- As for some people separate finances is an advantage, for others it's a disadvantage of companies money not being yours.
Limited company can be registered as limited by guarantee, where essentially it is set up as 'not for profit'. Instead of shareholders, there are guarantors with 'guaranteed amount' and all of the profits are invested back into the company.
Still not sure which business structure is right for you? Contact us or follow for more information about business entities.