In the UK, it is common to use three structures when setting up a new business. The most common structure is the Sole Trader business structure, but today we are going to talk about the second most popular structure, Company LTD.
According to Companies House, there are more than 4 million limited liability companies currently registered in the UK with more than 500,000 new companies being created each year.
Many of our clients have asked about the advantages and disadvantages of setting up a UK LTD for their new online business, so we decided to make some key points in the article. write this.
UK Limited Liability Company:
As is known, the formation of a Company LTD is the second most popular business structure in the UK.
Unlike an Independent Trader, being a director of an LTD separates you as an individual from the company itself.
This means that the debts incurred by the business must only be paid by shareholders and owners, not individuals. The company owner’s finances are not at risk when operating as an LTD Company.
Advantages of LTD. Company
We already know that LTDs are separate from individuals, but let’s take a closer look at the other advantages of setting up a UK LTD.
Low Taxes: Everyone Loves This One! A company is exempt from tax if it generates no revenue in the UK and only has to pay an annual business renewal fee, which is much lower than in many parts of the world and much lower than the tax rate that a single Trader would pay. will have to pay in the UK.
Better Personal Protection: Because the LTD Company is a separate entity from you as an individual, your assets and finances are always protected should your company fall into any kind of situation. Unfortunate situations where the business is at risk. However, it is important to note that any investment you have made in the company is risky.
More Credibility: Limited Liability Companies are all legally registered with Single Member LLCs, the UK Government department that deals with the incorporation and dissolution of companies in the UK. Older brother.
This means that you will not only be registered on the Gov UK website but will also be more valued in your business dealings if you are an LTD Company.
Better Investment & Lending Opportunities: As your business grows, you may want to expand but find yourself constrained by a lack of capital. A limited stock limited company LTD means you have the option to sell shares to investors, allowing you to invest more in the growth of your business.
LTD Companies also have more commercial lending options available to them if you want to seek funding from a bank.
Disadvantages of LTD. Company
With any new business venture, there are always advantages and disadvantages when choosing how to structure your operations.
Let’s take a look at some of the disadvantages associated with setting up a UK LTD.
Keeping and Accounting Costs: Unless you do all the bookkeeping and accounting yourself, which we do not recommend, then you will have to pay a professional to assist with the accounting and bookkeeping costs. your company obligations such as tax returns.
The time you can spend doing these things is generally much better time spent on your business, but you won’t need to allow some out-of-pocket costs to manage the hosting side. profile of your business.
Public Information: Once registered with House, all your company information will be published on the website and accessible to anyone. Include your registered office address.
However, the benefit of using ICOS is that we provide you with a registered London address so that your address is not published.
Difficult to set up: While setting up a new company is fairly straightforward, we have experience and have successfully helped many overseas business owners set up a company in the UK.
If you are not from the UK or have never set up an LTD before, it can be quite a daunting task. That is why many people choose to use ICOS services to help get their business up and running in no time with a much simpler process.
SUMMARY
If you have read our guide on how to form a UK LTD then you may already be aware of the great benefits of using this type of structure for your business.
There is no doubt that setting up an LTD Company is not entirely easy for people living abroad, as many of our clients do, but that’s why we get great feedback. great from clients who choose to use ICOS to handle their new UK company formation.
This article does not cover every advantage and disadvantage involved in setting up a UK LTD Company, but it is written to give you an insight into the process so you can make an informed decision. Make a more informed decision for your business.
ICOS is always happy to discuss your business needs and answer any questions you may have on our FanPage.
If you are thinking about setting up a business in the UK, we offer three company formation options for online business owners and we also have personalized services to suit a wide range of needs. other business owners.
Thank you for reading this guide, we look forward to helping you meet your online business needs in the future!
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