Running your own business as a limited company can provide an ideal foundation on which to grow your business and give yourself a solid legal and financial base to build on. It’s exciting and inspiring, and brings with it the potential for great financial rewards as your business grows.
Setting up a limited company
But setting up and running a limited company is not a decision to be taken lightly. Because establishing a company is a legal process, and your company itself will be a separate legal entity, it entails a greater level of responsibility and commitment.
There’s the legal procedure for actually setting up and registering a new company, making sure it is tax compliant, and the ongoing accounting and administrative requirements. And that’s before you even get to the day-to-day tasks involved in delivering your services, keeping your clients happy and winning more work.
Benefits of a limited company
Running a limited company does bring tangible benefits. Some of the main ones include:
Put simply, and assuming you follow the rules, if you are a director of a limited company and things go wrong, you are not personally liable for any financial losses made by the company.
Similar to the above – the company is a separate legal entity, so everything from the company bank account and tax liabilities, to any assets, like PCs, equipment or furniture, belong to the company, not to you. Your personal financial and tax affairs are wholly separate.
Limited companies can be a more tax efficient way of running a business, meaning you save on tax – perfectly legitimately – and potentially save on National Insurance costs, too.
Being a director of a limited company has a certain kudos and credibility. This can be reassuring to your clients. In addition, some big organisations only deal with limited companies, not sole traders or partnerships.
As well as the protection of limited liability, once you have registered your company’s name at Companies House it is protected by law, so no one else can use it or anything that looks too similar.
Because a limited company is a separate legal entity in which you as a director hold shares, it is much easier to transfer ownership than with a more informal business structure – you simply sell or transfer your shares to someone else.
Staying Connected
If you decide that working as a limited company is the best option for you, you can take advantage of Connect, our innovative, user-friendly accounting service that connects all the different strands of your company accounts – invoices, statements, expenses, VAT, PAYE, National Insurance, tax returns – in a single, automatically-updated portal that is updated daily and available 24/7.
And of course, it is all backed up by our Specialist Support Team six days a week, so you are never left to fend for yourself.
Free Limited Company Guide
To learn more about setting up a limited company and whether it is right for your business, take a look at our free guide which explains the process in more depth and provides the information you need to make an informed decision that is right for you.
If you would like to find out more about your working options and which way of working may be best for you, call our New Business Team today on 0800 230 0213 or email newbusinessadvisors@brookson.co.uk.