Company Formation - Harmonix Accounting

If you are starting a business, forming a limited company can save tax and has other advantages.

A limited company is a separate legal entity that has similar legal rights and responsibilities as an individual. It must file tax returns and pay corporation tax on its profits. As the name suggests, a limited company has limited liability. This means shareholders liability is limited to the amount paid for their company shares. However, if a business trades fraudulently, or whilst knowingly insolvent, director’s assets can be seized.

Forming a company requires the appointment of a director (or directors) to run the company in accordance with company law. You may also wish to appoint a company secretary. You will also need to allocate shares to shareholders.

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If there are multiple shareholders, you should consider a shareholders agreement. This is a legal document that regulates the management of the company to reduce the risk of disputes. In the event of disputes it will contain provisions to resolve them.

Existing Businesses

Due to the tax advantages many sole traders are incorporating their businesses.

If you are an existing business considering incorporation there are tax issues to consider. If your business has certain assets you will have to consider how you transfer these. Capital gains tax (CGT) may be chargeable and in many cases can be avoided.

"Harmonix Accounting can help with your New Business Company Formation - Call Rob Waight On 02392 389 457 Today!"

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