Setting up a limited company in the UK is a quick procedure that can be carried out online. Anybody planning to start a business should consider the benefits of setting up a limited company as this can be a most attractive options.
Benefits of a Limited Company
One major benefit of creating a limited company is that it is a separate legal body and this gives the directors protection in the event of liquidation or bankruptcy. Furthermore, when a limited company is operational, all contracts and jobs or products supplied are at “arms length”, meaning clients and customers are dealing with the company and not with directors or employees personally.
Companies can only be shut down if they are officially dissolved or put into liquidation, using the procedure laid out by the UK Government. As this is the case a limited company can survive many problems, including the death of the owners and this gives greater job security to employees.
Companies can also benefit from tax incentives that are unavailable for sole traders or partnerships.
What is a Limited Company?
A limited company is a company/business that is limited by shares and must be registered with Companies House. All of the rules for setting up a company must be followed, including having at least one director and one shareholder, a company name and company address. The company should have a formal shareholder agreement for its set up, known as a Memorandum of Association and written rules, known as Articles of Association.
When the company has been registered officially, Companies House send a Certificate of Incorporation which gives the company’s number and the date it was incorporated. Every business needs to register for Corporation Tax within three months of its official date of incorporation and there are a number of procedures and rules that must be followed in order to operate a company within the remit of the UK legal framework.