The benefits of setting up a limited company
18 November 2016
You will be much more secure with your finances. You are fully protected if anything should go wrong and the implications will not be put on your shoulders. If you were self-employed, you would not have any real financial security. It is not the individual who would take the blow; but the limited company, which gives you a bit of breathing space from the business itself. In the highly unfortunate case of the business collapsing, your own finances and properties would not be affected, which gives you a bit more stability within your personal life.
You will pay far less tax than if you were a sole trader which is a great benefit. The tax rate that you would be paying is approximately 20% at the current time, and will drop even further by 2020 to around 17%, unlike sole traders which may reach highs of a whopping 40%. If you are set up as a limited company, you are able to pay through loans, dividends and PAYE which may save you huge amounts of money when it comes to paying tax. Therefore, you are able to keep more money that you have earned through the business, which is always a plus.
A company name
One of the great aspects of setting up a limited company is that you can have your very own company name which can become highly recognisable and make your business successful and well protected. Your business should appear much more professional to outsiders who may collaborate with you; especially larger companies who may only do business with trade names. Don’t cut yourself short from opportunities; if you are looking for big collaborations and recognitions, change from a sole trader to a limited company.
If you would like any further information on limited companies or company formations, please visit our website or give us a call today!
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Brendan Corr, Corr & Corr Chartered Accountants