The biggest question a business owner faces when starting their business is whether to do business under their personal name or under a Ltd company. Each individual's circumstances are different and it does not mean that what best suits one individual will suit another. Here we are trying to explain this for you. 

WHAT IS LIMITED COMPANY?

A Ltd company is a separate legal entity from its directors and shareholders. What this means is that in case the company is unable to pay its debts on time, its officers will not be personally responsible for those debts, meaning their liability will be limited. The business  can be conducted under the following 4 structures:

Sole Trader - as an Individual

Ltd Company by share/guarantee

Ltd Liability Partnership (LLP)

Partnership - two or more people/companies

It is always worthwhile to seek professional advice to see which structure suits you best however few things to consider are:

What will be your trade?

What is your risk appetite?

Who will be your customers?

What industry will you work in?

How professional do you want to look?

SOLE TRADER VS LIMITED COMPANY – KEY TAX & LEGAL DIFFERENCES

SOLE TRADER OR PARTNERSHIP

• You are the business

• You are the owner

• You are the sole-proprietor

LIMITED COMPANY: YOU ARE DIRECTOR & SHAREHOLDER

• The business is a separate legal entity

• You are a shareholder; you hold all or part of the company’s share capital

• You serve the company as its officer as a director (a company secretary is an officer too)

If you want to discuss this topic further, please contact NUMERATE ACCOUNTANTS at 07765838151.