Why a limited company
A limited company is a company that is structured and run differently from a trading corporation or public company, as it is limited by what the company has invested in. It is therefore structured slightly differently from a public company and subject to different rules and regulations.
If you would like to learn more about why a limited company is advantageous, please visit our Offshore Company Tools section.
Limited company explained
A limited company is a legal entity that is structured in such a way that it is limited by shares or by guarantee. A limited company is one in which the liability of the members of the company is limited to what they have invested or guaranteed to the company. This is usually in the form of shares however can also take the form of a guarantee.
A limited company is governed by its own articles of association and has its own legal rights and obligations. It is established with fewer investments or legal guarantees than a standard company and must operate within the legal constraints of the Company’s Act.
There are numerous reasons as to why a limited company is advantageous to investors. A limited company offers a range of benefits to investors and shareholders. For example, it offers greater protection in difficult circumstances, such as company loss or failure. In the event of any company instability or failure, personal assets of directors and shareholders are not at risk, as the company is a separate legal entity from the shareholders and directors.
Another benefit of a limited company is that it offers greater flexibility in terms of tax charges. Limited companies are required to pay lower corporation taxes than self employment companies, and offer a wider range of allowances and tax-deductible costs that can be offset against a company’s profits. In addition to the above, if the company is sold at some point in the future, the process of selling shares is much easier to achieve than transferring a sole trader or partnership.
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