Limited Company Formation & Incorporating an Existing Business

Limited Company, Partnership (LLP), or Sole Trader?

Determining how you structure your business has a large and lasting impact on the amount of tax you pay. It can also be a factor in financing, legal risk and succession / inheritance planning.

Profitable owner managed companies can often benefit from incorporation, holding their business as a Limited Company, and the relatively small accountancy fee can often be quickly off-set by the larger tax savings which are achieved on profit extraction. Incorporating will not always be the right choice though, and we are happy to assess this for you and advise a way forward.

New Limited Companies need to be aware of the on-going regulatory requirements which includes keeping accurate records through bookkeeping, as well as submitting annual accounts and a corporation tax return. We can take care of all of this for you, making the process effortless.

Get in touch with us for a free conversation about setting up your new business or how it can be structured.

Benefits of running your business through a Limited Company:​

• Pay less tax on your take home pay by utilising dividends and dividend allowance, which can attract a lower tax rate than being a sole trader.
   
• Longer term tax planning with a Limited Company such as operating pension schemes or Business Asset Disposal relief (formerly known as “entrepreneurs relief”) if you are thinking of one day selling your company.
   
• Reduced legal risk from being sued; your personal assets are at far lesser risk than a company not using a Limited structure. You can also take advantage of structures to protect your companies assets from claims such as creating Holding companies.
   
• Improved credibility with customers and investors. More opportunity to raise finance or investment through issuing share capital.
  

Why Limited Company incorporation may not be the right choice for your business?

• Tax savings may not be large enough (or exist at all!) to offset the increased regulatory burden and cost. All Limited Companies must submit annual accounts for example, where as sole trader businesses do not.
   
• Your business may be a part-time project or something you do not expect to continue long term; the administrative burden would not be worthwhile.
  

Other Structures to Consider

• A “LLP” partnership offer some of the benefits of a Limited Company such as Limited Liability Protection (hence the name), whilst having a reduced administrative burden. This is a less common structure but can be the right choice for certain situations.
   
• A Limited Company in combination with a Holding Company can give you reassurance your accumulated business profits or assets are protected. Many owners do not want to take out more money from their company than is necessary as it attracts a large tax bill; the downside of this is any money in your Limited company is at legal risk in the event you were sued or taken to court. Moving money or assets to a Holding Company can protect from legal claims whilst not attracting any additional tax.
  

Contact us today using the form below to find out more about our incorporation and limited company formation services.