Are you thinking about setting up your own limited company? Are you considering whether it’s the right option and the advantages in setting up a ltd company?
So, what are the advantages?
- The limited company model is typically the most tax efficient business structure to use. Dividends are subject to dividend tax, and not National Insurance Contributions, which means that company directors are taxed more leniently than sole traders or traditional employees.
- The liability of its directors is limited. As a sole trader you are personally liable for business debts unlike limited company directors.
- Depending on the industry that you are in, it can be seen as more of a professional ‘image’ to be a limited company. In others it may be a mandatory requirement.
- As a limited company you may find it easier to raise funds than if you were a sole trader.
- If you would like to attract investment into your business, to be taken seriously being a limited company is key.
- A registered company means that your companies name is legally protected through Companies House. As a sole trader this would not be the case.
- The cost of setting up as a limited company is not as high as you would imagine, the entire process could cost you less than £100!
For more information on setting up your own limited company and professional help in doing so, Johal and Company are the perfect accountants to talk to in Havering.