UK Limited Companies
If your business fails, limited liability can protect you from personal loss or even bankruptcy which a sole trader could not avoid, Unless you have given a personal guarantee for a particular transaction, or acted illegally, the debts are the company's and not yours.
Commitments and liabilities for raw materials, wages, premises or leases are better covered under limited liability.
When you register your company name. it be unique. For long exists, the can never be copied by another company.
There is something about owning a 'company' which owning a 'business' doesn't quite have. A company is seen as more prestigious. This may be just a perception, but it can affect the behaviour of clients, customers, suppliers and employees.
A company is easier to value, buy and sell because its ownership is known precisely. A company's owners are listed officially, alongside information about the proportion of the company (or shareholding) they own. As a result, the relationships between joint company owners are less complex than those in partnership agreements.
A company share can be sold or given away in a will.
Forming a company is not expensive — a small sum compared with the investment you'll need to establish your business.
Companies only need to have their accounts audited by a chartered or certified accountant if they have a turnover of more than é5.6m and gross assets of more than E2.8m. Below those levels, companies need only file limited information called 'Modified Accounts'. They can request an audit, but it is not required.
Many suppliers prefer to deal with a limited company rather than a sole trader, This is because they can check up on the financial standing of a company.
A sole trader owns the business assets personally and can make cash 'drawings' as required. In contrast, company assets belonging to the company must be used for company business. 'Drawings' are now taken as 'salary' plus dividends, after tax.
Company directors are normally counted as employees of the company and will pay tax through PAYE.
You will need:
- the company name
- the people - names of the shareholders
- a registered office address
- Memorandum and Articles of Association - objectives
- names of the directors
- dates of birth
- colour of eyes
- town of birth
- mother's maiden name
- shareholding details i.e. number of shares.
You are free to choose almost any name you wan for your company, as long as it:
- is not the same as another name on the register.You can check this by carrying out a name search
- isnot offensive
- does not constitute a criminal offence
- does not give the impression that your business is connected with the government or a local authority.