5 reasons to be a limited company
Should I be a limited company? I get asked this a lot, and the answer is it depends on your business and personal setup.
But in general, it is because of 5 key things:
1. Liability insurance
2. Employing people
3. Business partner
4. Tax & control of income
5. You want to be seen as a bigger business than you are.
Liability
Liability is a critical one. If you have insurance of any kind and you are a sole trader, if the insurance is inadequate, you are liable for your personal assets (house, car etc). So make sure you have adequate insurance cover especially if you are a sole trader. It’s the main reason I am a limited company, to protect me professionally.
Payroll
If you are employing people a limited company gives you a legal framework to work...
Being a sole trader
There is often a lot of talk about whether you should be a sole trader or a limited company. There are circumstances when being a limited company is a really good idea, such as having people on the payroll or being in business with someone else. The main reason for most service businesses is that they want to save tax. Once you take home more than £30,000 from your business (sales less costs), it is worth considering. But it isn’t always the right thing to do and you should consult an accountant first. More information is here.
You must make sure you have sufficient insurance in place. When you are a sole trader, liability if a client sues you is unlimited (hence Limited company) and you need to have solid insurance in place to ensure they can’t take your house.
Being a sole trader, if you have been in business for more than a couple of years, has also been much easier to claim from the government in recent...
