Limited Companies

A Limited Company is a legal entity in its own right and this is fundamental in understanding how a Limited Company operates. It can be confusing what type of business to trade through when first starting out, and there are a number of reasons you might find it beneficial to choose a Limited Company.

A Limited Company has many advantages, perhaps the most important of which being limited liability. Limited liability means that the company’s assets are kept entirely separate from the business owners’ personal assets (and therefore in direct contrast with Sole Traders and Partnerships), and so if the company gets into financial difficulty the business owners’ assets will be unaffected. So if you have personal assets such as property that you wish to safeguard this is typically the safest option to choose.

Limited Companies also have a perceived prestige over a Sole Trade or Partnership business. If you are seeking investment for your business then a Limited Company will typically be the right option due to the share structure that a company has along with the way a company separates business assets from personal ones.

There are many other considerations to keep in mind when forming a Limited Company such as the legal responsibilities each director has, and that some information on your company will be publicly available via the Companies House website.