When starting a company, you must decide which business organisation to merge and continue to operate before you register with the help of a site like https://www.yourcompanyformations.co.uk. Choosing a business organisation is very important to shape your business motivation.
Private limited company registration
A private company refers to a company in which all the shares of the company are privately held. They can run their own business or hire directors to manage the company on their behalf. It is a business entity privately held by certain shareholders. It limits the owner’s liability to the scope of the shares held by him and limits the numbering.
Advantages and disadvantages of setting up a limited company
- A limited company can enjoy permanent continuity and can operate for generations.
- The private debts of shareholders will not be involved in the properties and assets held by the limited company.
- The limited company has statutory documents to protect the rights and interests of all shareholders (investors), so it is easier to gather funds.
- The debts of the limited company are limited, and the risks in the operation of the business will not involve the private property and property of the shareholders.
- Due to legal protection, there will be no more than one limited company with the same name to avoid being faked or deceived.
- Operating a business as a limited company can give customers, suppliers, and banks a good impression and help business development.
Tax incentives for the establishment of a limited company
- All expenses such as entertainment expenses, car expenses, and travel expenses can be deducted in full.
- The salary of directors (proprietors) and their spouses can be deducted as expenses.
- Operating as a limited company, profits from overseas sources do not need to pay profits tax.
- Using a limited company to transfer buildings can save a lot of profits tax, stamp duty, and lawyer fees.
- You can fully deduct expenses such as interest on installments of buildings and automobiles, and you can enjoy depreciation allowances for fixed assets.
Disadvantages of setting up a limited company
- Disclosure of information – Companies law requires companies to disclose certain information to the public. For example, capital structure; personal data of shareholders, directors, and secretaries; mortgage transfer of shares, etc.
- The procedures for establishing a limited company are more complicated
- A limited company is regulated by the Companies House. Compared with a partnership, the procedures for establishing a company are more complicated. After the establishment of the company, the directors and the secretary continue to have the responsibility to submit specified statements to the Companies Registry, as well as to prepare audited accounts.
- Save the record companies must maintain certain registers, such as the register of members, register of directors and secretaries, register of charges, as well as specific meetings in the company’s operations (such as the AGM, the Extraordinary General Meeting, the Directors Bureau meetings, etc.).