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Forming a Limited Company
- By Niccolo Machiavelli
- Published 2 October 2008
- Business Ideas
- Unrated
In case you have been self-employed for a long time and you think you can do much better at running an enterprise than your irritable boss, then you may want to form a limited company.
Forming a limited company indeed sounds a straightforward and fantastic idea. In fact, becoming a limited company is in many ways a benchmark for how far your business has come. Moreover, it will also lends an air of legitimacy, respectability and authenticity to all your future dealings. However, the main objective behind registering a company is far more than just these factors.
One of the main advantages of forming a limited company is that it grants you a limited liability status. The limited liability status means that even if the company goes into receivership position, then the assets of the shareholders and officers are not at any risk whatsoever, as long as you have always operated within the law.
Moreover, under the status of sole traders and partnerships, one is supposed to pay tax right from the first penny of profit that they are making. However, in case you are a limited company, then a good amount of your initial profits, depending on your government's regulations, would be free from taxes.
It is commonly noticed that customers and suppliers have a greater amount of confidence in a limited company than a non-limited business entity. A private company would find more people happy to deal with it, thereby making substantially easier for the business to
grow.
Registering is also a good way of protecting your brand since no two limited companies are allowed to have the same name. A limited company has no obligation to begin trading immediately, so registering is a simple and cost-effective way to protect a business name.
There are a lot of enterprises that offer to help with the process of registering a company. However, the cheapest and most straightforward way you could establish a limited company is to approach the Companies House directly. Follow these steps:
Apart from this you will need to do some paperwork, filling up of some requisite forms that provide details of directors, the secretary and declare compliance with legal requirements. The form names can vary from country to country, but you will get the required information at the Companies House. In case you want to save all these efforts then you may hire lawyers or business agreements specialists to do all the dirty work for you. However, this will obviously cost you a bit. You can even buy an 'off the shelf' company from a company formation agent. Although this is the quickest way possible, it is equally expensive as well. The 'off the shelf' company would have a company name of itself and all you need to do is just change the offer address.
Forming a limited company indeed sounds a straightforward and fantastic idea. In fact, becoming a limited company is in many ways a benchmark for how far your business has come. Moreover, it will also lends an air of legitimacy, respectability and authenticity to all your future dealings. However, the main objective behind registering a company is far more than just these factors.
One of the main advantages of forming a limited company is that it grants you a limited liability status. The limited liability status means that even if the company goes into receivership position, then the assets of the shareholders and officers are not at any risk whatsoever, as long as you have always operated within the law.
Moreover, under the status of sole traders and partnerships, one is supposed to pay tax right from the first penny of profit that they are making. However, in case you are a limited company, then a good amount of your initial profits, depending on your government's regulations, would be free from taxes.
It is commonly noticed that customers and suppliers have a greater amount of confidence in a limited company than a non-limited business entity. A private company would find more people happy to deal with it, thereby making substantially easier for the business to
Registering is also a good way of protecting your brand since no two limited companies are allowed to have the same name. A limited company has no obligation to begin trading immediately, so registering is a simple and cost-effective way to protect a business name.
There are a lot of enterprises that offer to help with the process of registering a company. However, the cheapest and most straightforward way you could establish a limited company is to approach the Companies House directly. Follow these steps:
- - Form a memorandum of association. The document is also know as the 'doctrine of lapse' or the 'lifeline of the company'. It outlines the company name, its registered offices and its functionalities.
- - Articles of association. The document establishes the rules regarding the company's internal affairs.
Apart from this you will need to do some paperwork, filling up of some requisite forms that provide details of directors, the secretary and declare compliance with legal requirements. The form names can vary from country to country, but you will get the required information at the Companies House. In case you want to save all these efforts then you may hire lawyers or business agreements specialists to do all the dirty work for you. However, this will obviously cost you a bit. You can even buy an 'off the shelf' company from a company formation agent. Although this is the quickest way possible, it is equally expensive as well. The 'off the shelf' company would have a company name of itself and all you need to do is just change the offer address.
