When you start a business, you’ll have to decide on a legal business structure for your start-up.
You have a choice of being a sole trader, a partnership or becoming a fully fledged limited company. For most start-up businesses, becoming a limited company is the way to go.
If you want to grow and scale, a limited company structure is flexible, tax-efficient and set up to grow along with you. It’s the long-term option that works for the future success of your start-up.
- Limited liability – setting up a limited company means registering your business with Companies House and HM Revenue & Customs (HMRC) and becoming a director in the company. By doing this, you separate your personal and business finance and limit your liability (that’s why you’re ‘limited’).
- Dividend payments – as a director, you’re paid in dividends and save on tax as you pay corporation tax on your profits, rather than income tax on what you’re paid.
- A more professional brand – It’s easier to find funding and scale the business and you’ll have a more ‘professional’ brand to market to customers – in short, it brings some real kudos to your company.
- Annual accounts and returns – there’s is some reporting and admin needed when you’re the director of a limited company. You’ll have to produce public annual accounts and an annual return and submit these to Companies House and HMRC.
If you’re building a start-up and want to know more about becoming a limited company, give us a call on 01454 300 999 or drop an email to firstname.lastname@example.org