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The Best Advantages of Setting up a Limited Company In The UK

Business owners that choose to act as a sole trader, on the other hand, are not afforded this legal protection unless they also register their company name with Companies House. <br>

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The Best Advantages of Setting up a Limited Company In The UK

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  1. The Best Advantages of Setting up a Limited Company In The UK

  2. If you intend to set up a limited company in the UK, you have to register your business with Companies House and Her Majesty’s Customs & Excise (HMRC). Whilst the thought of complex paperwork might make you sigh, the benefits of registering a limited company in the UK outweigh the time it takes to fill out the official forms. Of course, if you are pressed for time and do not enjoy the prospect of registering legal documents, there is always the option to use a company formation service to register your company on your behalf. You can find low cost company formation services in London for as little as £2.99.

  3. Legal Advantages of setting up a limited company in the UK Once your company name is logged with Companies House, the name is protected by law. Other businesses cannot use the same name or create an off-shoot that sounds similar. Business owners that choose to act as a sole trader, on the other hand, are not afforded this legal protection unless they also register their company name with Companies House. Because it is not necessary to register your company as a sole trader, there are thousands of business owners in the UK that have a company name anybody can use. This could be damaging for sole traders.

  4. As a limited company, you also have the legal authority to sell shares. This helps to fund the company and increase your purchasing power. With the right stakeholders, you can also give the reputation of your company a boost from the get-go. Tax Benefits of Registering A Limited Company in the UK Setting up a limited company under UK law provides you with several key tax advantages. As a director or shareholder, you will pay less personal tax than if you run your business as a sole trader.

  5. However, you will also have to pay tax on your company profits as well as your personal income. In the UK, companies pay Corporation Tax at a rate of 19% for the tax year 2019/20. The government is reducing this to 17% from April 2020. Depending on your personal income, as a director or shareholder, you will pay 20% on your taxable earnings over £11,850. If your earnings are over £46,351 you will pay 40% and an additional 45% on anything over £150,000.

  6. Directors and shareholders of a limited company in the UK are also entitled to pay themselves a small salary which gives you a fixed monthly income. By doing so, you minimise the amount of National Insurance Contributions you pay. Limited Liability A limited company is classed as a separate entity from its owners. This means that business assets, tenders, contracts and debts belong to the company and not its shareholders. The advantage for shareholders is that if the business should fall into administration, any debts are settled by funds raised from the company and not from your personal assets.

  7. The Benefits of Using a Company Formation Agent Registering your business as a limited company in the UK clearly has more legal and financial benefits than acting as a sole trader. If you run your business from home or from outside the UK, you can still register as a limited company but you would have to use your private residential address which would then be available in the public domain.

  8. The alternative option is to register a business in the UK through a company formation service in London. This gives you the advantage of using their address as your official registered office and experienced professionals will handle all the paperwork for you. Most company formation services also scan the registration documents and send them to you as part of the setting up fee. If you want to receive paper copies you will need to pay the additional charge to cover the cost of postage. Setting up a limited company in the UK gives you more advantages than running your business as a sole trader. Registering your company from a London address ensures that your residential address remains private and can help give your company image a boost.

  9. Address- 95 Mortimer Street London,UK Phone: 0208 786 7200 Email: info@lowcostletterbox.com Web: https://www.lowcostletterbox.com

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