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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