Is it worth setting up a limited company?

When you first started out, you could easily manage your finances through being self-employed but as your business grows, it is worth looking at the benefits of setting up a limited company.

Once the profits of your business reaches you around £50,000 it is worth considering moving over to limited status. The benefits of doing so include:

Separate legal entity – a limited company is a legal entity in its own right, there will be a separate bank account and identity from the directors of the business.

Tax efficient – there are opportunities for more flexible tax planning as limited companies will pay a lower rate of tax on profits instead of paying sole trader income tax. You can also issue shares to family members, allowing you to reduce your personal tax liabilities.

Limiting your personal liability – by setting up a limited company, you will not be liable personally for any company debts.

Funding opportunities – as a limited company you can raise capital by selling shares in the business to investors. It is also easier to secure loans.

Gain more credibility – it could help you to do business with larger companies as being a limited company will be seen as more professional.

Setting up a limited company does not need to be a complicated process, the experienced Clear Vision Financial Management team will take away the headache of sorting out the whole process for you. We can advise you on everything you need to do and ensure all of the correct documentation is in place, as well as advising you on all of your tax liabilities going forward.

Clear Vision Financial Management are a team of accountants based in Romsey and Poole, if you would like any advice on your accounting needs and your options around setting up a limited company, please do get in touch. You can call us on 01794 330025 or email us.