Running your own limited company does bring a lot of extra responsibilities such as the additional administrative burden and statutory filing obligations. However it does also have its advantages:
1. You have limited liability so you are protected if things go wrong. As a director you will not be held personally liable for any losses made by the business. As a sole trader you would.
2. It can save you tax and National Insurance. As the director of your own limited company you can choose your own remuneration package. By taking a small salary and any profits in the form of dividends this can lead to significant savings.
3. You may be perceived to be a larger company if you have limited liability. This may be helpful if you tender for business with larger companies. Some industries may only deal with limited companies.
4. Once you have successfully registered your company, your company name is protected by law. Companies House has very strict rules for the naming of companies so no one else can use your name or anything deemed too similar.
5. Your company may have a sell on value when you decide to retire. Depending on your situation you may wish to sell the company or bring a new director on board when you wish to take a less active role in the business. This is not an option when you are a sole trader.
If you are interested in forming your own limited company why not give us a call and ask about our company formation service.
Simplyco are expert contractor accountants and can help their clients set up their own limited company, offering them expert advice along the way. To learn more, please give us a call on 01900 898 440 or email firstname.lastname@example.org.
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