A limited company is popularly called limited liability Company, which involves a type of business ownership to discover several features of the business. A company that is formed as limited shares few aspects with a corporation, few with privately owned company and few with a partnership. For limited company formation, there involves both favors and disfavors. One of the major advantages of a limited company is that the liability is limited by the members of the company. The members of the company are not accountable for the balance and debts. All the debts of the limited company are under the sole responsibility of the company, which cannot be bear by its members. By this way, a limited company functions in more the similar way as a corporation, however with some restrictions and requirements of the members. While establishing a business, you need to choose among the number of business structures like limited company, sole trader and limited liability partnership.
Benefits of forming limited company:
There are several benefits of limited company formation. The limited liabilities allows shareholders and directors to remain free from being worried for the possibility of failure that could in turn aids them make transaction more freely. In the scenarios of failure faced by the company, the company’s personal assets will be in danger when they are non-restricted firms like a non-limited business establishment or other sole proprietorship. As long as the limited company formed is legal, there is no necessity for any official to undertake business operations with a feel of anxiety from losing the personal assets as mentioned in the provisions of companies act. When it comes to favors of reduction incentives and tax exemption, unlike the partnerships and the sole proprietorships, the initial 10, 000 of a limited company profits will be considered as tax exempt. The shareholders are allowed dividends that are sourced out of the company profits. In the recent days, national insurance is not associated with reducing tax liabilities and paying dividends further. In the limited companies, modifications in legislation for the previous years involve reduced costs in terms of accounting and tax.
Protecting company name and cost factors:
A limited company is not necessitated to start trading within a set time frame after making registration. This enables prospective entrepreneurs to register their corresponding business names in the hope of future developments. Being as a first business to register the name would assist in minimizing the cost and also becoming able to gain the benefit of being first mover as no two businesses must have the same. Suppliers, customers and businessmen have more confidence with this type of limited company formation. Large organizations often don’t prefer setting up dealings with non-limited businesses. It is greatly seeking suggestions from professional agency that could help in forming a limited company. As registering for forming ltd company involves a complex process, the intervention of reputed agency is important as they can offer quality, trustworthy and fast services at a considerable price range.