- A limited company is a separate legal entity, this means that when a director or shareholder leaves the company, the company operations will continue, this way the employees and other stakeholders are still secure.
- Limited companies can sometimes be more tax efficient and funds for the company can be raised by issuing shares to investors.
- A limited company is easier and more likely to be sold as compared to a sole trader
- A limited company usually creates an element of prestige. The corporate identity often appears more professional, more established, consumers and creditors know that they are legally registered and regulated.
- A limited company is generally more credible to potential customers, partners or investors.
- Once a limited company has been registered with Companies House, the name of the company is protected and cannot be used by another company.
- A limited company generally has a lower personal financial risk, because of the structure and separation between the company and the directors; they are protected from the personal financial losses.
- A limited company usually has tax benefits; it is to result in a lower tax liability for managers. Various tax planning opportunities exist which can be tailored to the situation and circumstances.
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The process to set up a limited company in the UK is easy, simple and quick. A limited company is an entity which is managed by directors and owned by shareholders and in which the shareholders have limited liability. The reasons to set up a limited company are:
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