More and more business owners in the United Kingdom are choosing to incorporate their businesses as a Private Limited Company. Private Limited Companies (Ltd) are the most common form of company incorporated in the UK, with thousands of new companies registering every year as companies find receive significant benefits over other company types.
Easy Set up
The paperwork and filing procedures to register for a Private Limited Company is fairly straightforward. Thanks to the recently overhauled electronic registration system from Companies House, the UK's official registrar of companies, you can now register your Private Limited Company online using authorised agents, and quality Accountants Ltd will be willing to help you register your business in as little as one day.
In case the company fails, every shareholder's personal assets are protected. In a company run as a sole trader, the owner's personal liability is unlimited in the event of a company failure. In a business structured as a Private Limited Company the owner's personal assets are kept separate from the company's assets and are therefore safe in case of business insolvency.
Increased Tax Flexibility
Registering as a Private Limited Company is a more efficient tax structure. Since the company is its own separate entity its profits are subject to a corporation tax, separate from the directors and shareholders personal tax returns. Additionally, if your Private Limited Company has an annual turnover in excess of £81,000, you have to register for Value Added Tax.
Structuring your business as a UK limited company gives your customers and suppliers a sense of assurance and stability. Many bigger corporate entities will not even deal with a company set up as a sole trader or partnership, but they will gladly do business with a Private Limited Company.