There are many advantages for operating as a limited company. Including the limited liability status that Is assigned to the company and the significant opportunities for tax mitigation due to favourable tax breaks.
A limited company is a separate legal entity in its own right, that means that the company's Directors and Officers will not normally be held personally responsible for the company's debts.
The main advantages to the formation of a limited company include:
- The limited liability status of a company means that the personal assets of the Directors and Shareholders are not normally at risk in the case of insolvency.
- Limited company status can increase the flexibility in the nature and distribution of profits to achieve an optimum financial or tax solution.
- The formation of a limited company can instill more confidence In both potential customers and suppliers - some larger companies in the UK will not trade with non-limited companies.
- The limited company status can protect the company's name as it ensures that no two limited companies can have the same name or even a similar one. In certain circumstances, businessmen will proceed with a Limited company formation to protect a name to be used at a later date.