What is a limited company?

What is a limited company?

As it says in the name a limited company limits the liability of the directors, if the company went into administration, then the liability to the shareholders is limited only to the capital that they originally invested.

Holding a limited company rather than a partnership or self-employed offers protection if the worst should happen and the business falls into financial difficulties.

As a shareholder your liability is capped to what you initially invested into the company and directors will not be held responsible for financial losses in its entirety except for illegal activities such as fraud.

Owners of a limited company will also benefit from having a supplementary income from dividends which are also taxed less than a salary and are not subject to national insurance, if you are a sole trader you will need to pay national insurance on all of your income.

A limited company is also seen more as a professional organisation and can encourage clients that will only work with limited companies to pay consideration to your organisation to work with.

There are many other benefits of being a limited company and Brilliant Accountants Milton Keynes is here to advise what type of organisation your business would benefit from being, why not call us today for a meeting to discuss your company and accounting needs.

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