Benefits of a Limited Company
There are many benefits of a limited company; these are just a few that you might consider before forming a new company.
Easy Formation
Private Limited Companies benefit from a quick and easy to set-up. With The Company Warehouse, you can form a Private Limited Company from FREE, including a business bank account. Our Company Formation Packages include everything you need in starting a new limited company and benefit from a very quick formation time of between 2 and 5 hours.
Limited Liability
The obvious benefit of a Limited Liability Company is the financial security that comes with business. The Company's shareholders will only be liable for any debt the company accrues according to the levels of their own investment and no more. This can provide a comfortable feeling of security for investors in the Company.
Financing (Public Limited Companies)
Due to the nature of the PLC's, they can benefit from raising finance where it is needed by the sale of shares. If the company gets into financial trouble or wishes to expand, it can simply raise more funds by selling more shares.
‘Limited Title’
As part of the incorporation, the newly formed Company benefits from the use of the title “Ltd” or “Limited” as part of its trading name. This adds an air of professionalism to a Company, presenting a better image for the public which might result in improved turnover and profit in the long term. Company Logo’s and a Corporate identity are an important part of the Company formation and success, allowing a Company to display its title on letter heads, websites, business cards and other related materials. Our Corporate Identity package will fulfill this need and our Trademark registration scheme will satisfy your other related needs.
Registered Office
Previously the Directors home address had to be registered as part of setting up the business and as such, was discoverable by members of the public. The recently fully implemented Companies Act 2006 has changed the law so Companies may now instead use a ‘Registered Office’. This address must be registered with Companies House and used in all business correspondence. The benefit of this to a limited company is it allows a director to keep their personal details separate from the business. It is still a requirement that the directors register their personal details, but as such they are not disclosed to the public. Our Registered Office Service allows you to do just this, we will specify an address for you and forward on up-to 10 pieces of legal or statutory mail to an address of your choice.
Profit Distribution
Profits made by the Company will be distributed to the shareholders in the form of dividends. This allows them to reap the benefit from their investment(s) in the limited company.
Ownership and Control
Private Limited Companies benefit from flexibility in control and ownership. This is due to the fact that the Directors are also usually the main shareholders of the Company. Thus both the ownership and control of the business remain in their hands. Decisions can be made quickly and easily, with little fuss, allowing for a more successful business management platform.
Economies of Scale
Generally speaking Public Limited Companies are larger entities. Thanks to their ability to raise funds by the sale of shares, they have a larger income and thus investment. As such, PLC’s can take advantage of “economies of scale” by buying goods in bulk, producing goods at a lower cost, thus cutting costs and making larger profits in the long term.
Company Name
Part of registering a Limited Company, includes the registration of a company name. A registered company name is a simple benefit for any company offering protection to a company and helping identifying the business and separating it from the competition in the marketplace. If you are thinking of setting up a Limited Company, use our FREE name search tool to ensure your chosen business name is available, and then register it for FREE! A Company name is protected from the registration date, yet a Limited Company is not legally required to begin trading on that date, so registration can be a good way to secure a name for future use.
Separate Entity
Being a separate legal entity, the Limited Company will benefit from a continued existence even after the death of the shareholders and/or directors.
Succession
Linked to the above, a limited company benefits from “succession” in that the ownership of the business can easily be transferred to someone else in the event of the current owner wishing to step down or retire.
Name Change
Section 79 of the Companies Act 2006 means that a company can now set its own procedures for changing its name. This might be important where a Company needs to re-brand to meet changes in the market, expansion into the foreign market or even where there has been a complaint about their current chosen name. This is a simple advantage to any Company operating in the UK. We offer a Company Name change service which will allow you to correctly and legally register your new name in order to trade properly.
Share Types
Another benefit of limited companies lie with their issue of shares. Limited Companies have the power to issue a number of different share classes. “Ordinary” shares have no special rights or restrictions, “preference” shares are given precedent during the annual payment of dividends, “redeemable” shares can be bought back by the company, while “participating” shares pay a dividend only if the company’s profits reach a specified level.
Flexibility of Objectives
Historically Limited Companies were required to set the objectives of their business (referred to as “objects”) in their Memorandum of Association. This amended by Section 31 of the Companies Act 2006, which now allows Companies to have unrestricted objects if it so chooses, leaving them free to operate in many areas and markets.
Company Property
Property of the Company belongs to the Company and not the members. Thus, the property is not affected by any changes in the ownership of the Company by purchase or sale of shares.
Taxation
One of the benefits of being a limited company is only being subjected to tax on the company profits (usually at a rate of 21%) and therefore not subject to the higher (personal) tax rates placed on sole traders or partnerships which can reach 40%.
Tax Relief
Limited Companies (especially small and medium sized new start up’s) are eligible in certain circumstances for benefits in the form of tax relief on spending they have made on research and development. In much the same way there are “capital allowances” made to business for investment in equipment and premises, whereby companies can write off the cost of the purchase against their taxable income. This is known as an “annual investment allowance” and a company can claim on the first £50,000 it spends on this area.
Environmentally Friendly Company Cars
Company cars with CO2 emissions less than 160gm/km and used exclusively for business are also viable for tax relief. Especially where such vehicles are fuelled by hydrogen or natural gases in an environmentally friendly way. Refueling equipment is also included in this relief.
Regenerating Company Premises
In certain disadvantaged areas, companies can claim allowances on any costs of converting business properties which have been vacant for a year or more.
Business Grants and Support
Small and medium sized companies can take advantage of government schemes in regards to grants and other forms of support. “Solutions for Business” are specifically aimed at assisting new business in a variety of areas, encouraging growth and expansion within the UK. There are many areas covered by the support, including grants for research and development, among other things.
Get Started Now!
As you can see, there are many benefits to forming a limited company. So why not get started now? Our Company Formation packages start from FREE and include many of the services you will need for your business to thrive in the marketplace. Order your limited company online now or contact on of our team if you have any questions.
Using our service means you benefit from our wealth of experience. You’ll get a fast, online registration service from the industry leading experts. Prices starting from free. Free legal and tax advice, free bookkeeping software and much more!
