Starting and running a business can be an exciting and rewarding experience, but it can also be challenging and risky. One way to mitigate some of these risks is to operate as a limited company. A limited company is a legal entity that is separate from its owners and directors, and it can provide a number of benefits for businesses in the United Kingdom.
Limited Liability:
With any business comes risk, sometimes substantially elevated risk. Using a limited company can help mitigate this risk by limiting financial risk to the company. Normally, company officers or shareholders are not held liable for any company debt, fines, or legal suits as long as the business has been correctly operated in good faith. This benefit can give a great amount of peace of mind to any business owner, new or existing.
Low Set-Up Costs: In the UK, limited companies are very easy to establish with a very low cost to do so. You can set up a limited company in some cases the same working day for as little as £10.00 or even for free!
Established Reputation:
Using a limited company rather than being set up as a sole trader can provide a portrayal of being more established and accountable. All limited companies are registered at Companies House, and information on all businesses is viewable on the company register. The register shows the Registered Office of the company, who owns the business, and who is responsible for running the business. Using a registered office service can give your business an extra reputation boost and avoid using your private home address on the register.
Your Business Name:
Every registered company name is unique, meaning once registered, nobody else can register a business with the same name while your company remains registered. While this is not like a registered trademark and does not offer the same protection, it does ensure no other business can register and copy your official business name.
Tax Efficiency:
Limited companies can be a great way to become very tax efficient in your business and investment practices. While we are not able to cover this in detail here, as there are so many options to consider, some of the main benefits include taking profits as a mix of salary and dividends, which can be tax efficient for business owners.
Privacy Benefits of Using a Virtual Office:
In addition to the established reputation and other benefits of using a registered office service, a virtual office can also provide privacy benefits. A virtual office allows you to use a professional business address as your registered office, rather than your personal home address. This can be especially useful if you want to keep your personal home address away from public records and databases.
It’s important to note that while operating as a limited company and using a virtual office service can provide many benefits, it’s always a good idea to seek professional advice to determine what is best for your specific business needs.
