5 Advantages of setting up a limited company.
With over 2,700,000 companies incorporated in the UK, sole proprietorship is a great idea for one or more of the following reasons.
1 It is easy and quick to get going
It is very easy to start a company, and a lot of it can be done on the internet. There is no longer the hassle of waiting a long time for a company to send over and process a raft of documents: Now you can begin to form a company in a matter of hours.
2 A separate identity
A limited company has its own legal identity. As a result, the company can endure the passing of the owner, and it is conceivable that both the directors and shareholders can change over time. The existence of the company can only to be stopped by orders of the court.
3 Owners’ Liabilities are Restricted
The shareholders of a company have limited liability for the amount of company debt. The extent of their responsibility is the amount paid for their shares, plus if they have outstanding shares of nil or those that are partly paid.
4 Authority and dignity
The founding of a private company points to that business being durable and that they are committed to the effective management and of being responsible.
5 The possibility of tax benefits.
Where partnerships will usually have to pay income tax, sole traders have to pay corporation tax, which is actually lower than that of income tax.
As well as the payment of salaries to employees, companies can pay dividends to its shareholders. The director is a shareholder, so frequently choose to take the tax on the most effective combination of salary and dividends.
The director retains the right to receive certain benefits without any government employee or employer national insurance contributions being payable. The repayments will be received as dividends which are likely to suffer less than in taxes than national insurance contributions. However, dividends will be subject to tax within the company.
A range of tax allowances and expenses can be offset against the profits of the company, so you should use a tax professional or financial advice in light of your particular circumstances, and this area is no exception.
Your Virtual Office London are leaders in company formation, mail forwarding address service and registered office address services. We also provide other important services for Limited Companies such as banking and accounting. What ever your need please do get in contact with the team today, we are always happy to discuss your requirements and then provide suitable advice.