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5 reasons why you should form your own LTD in UK

Nov 23, 2018

Even though registration of a company may seem a simple and a straight forward process, but there are requirements that demand some time and thought. Due to that that we have prepared a short check-list regarding the incorporation process in the UK.

1. Fast start.

It’s very easy to proceed with a limited company formation in the UK and it is possible to do this online. Long gone are the everlasting days of waiting for the Companies House to take care of the paperwork: now you may form a limited company in a timespan of few hours. Moreover, the costs of registration are relatively low compared to corporation taxes.

The latest Companies Act, made a lot of changes making it easier to create a limited company. The UK government always searches and examines ways to provide well run companies the freedom to succeed with business rather than get bogged down with administrative formalities.

2. Legal identity

Every company has its own legal identity, hence third parties contract with the ‘company’ and not the individual members of the said company. In other words, companies have the chance to survive the death of the owners and it’s possible for the management involved with the company to change over time. Only a formal dissolution or respective court decision will cease the company’s existence.

3. Liability

The shareholders have a limited liability for the debts of the company. The range of their liability is determined by the amount paid for their shares and, if there are any, the unpaid amount on any paid shares. Most commonly it is just the sum paid for the shares and additionally any unsecured loans made to the company. A limited company allows you to take all related business risks without the prospect of losing everything. It is worth mentioning, if shareholder is also a director of the company then the limit on their liability does not always apply.

4. Credibility and prestige

The creation of a private limited company surely suggest that the business has stability and is committed to effective and liable management. It gives both contractors and customers a sense of confidence. Additionally, many companies, especially larger businesses, will not deal with sole traders and partnerships.

5. Tax benefits

Private limited companies pay corporation tax. It is important to stress that corporation tax rates are lower than income tax rates.

Since a limited company can pay out dividends, a shareholder director will hence often choose to receive the most tax efficient combination of a salary and dividends. As long as a minimum level of salary is taken, the director reserve the right to certain state entitlements.

Apply for UK LTD Company Formation and our trusted specialists will provide you with all necessary information to make your business grow. Our solutions are bespoke according to each client’s specific needs.

If you would prefer one of our specialists to call you back to discuss your requirements, please CLICK HERE to complete the form.

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