The ADVANTAGES and DISADVANTAGES of setting up a private Limited company. What are the benefits of opening an Ltd company when starting a new business and how does having a Limited company compare vs being a sole trader?
I have been running Ltd companies for over 10 years and in this video, I share with you the real-world advantages and disadvantages of Ltd companies.
Advantages of Private Limited Company:
• Limited Liability (Personal and Business Finances Separate)
• Professional Image
• Name Protection
• Potential Tax Savings
• Basic Salary + Dividends (Link to Directors Salary 2020/2021 Below)
• National Insurance Avoidance
• Pension Contributions are Tax Deductible
• Income Can Be Spread Over Multiple Years
• Easier to Sell
• Only Costs £12 - https://www.gov.uk/set-up-limited-company
Disadvantages of Private Limited Company:
• More Complex Accounting / Administration Requirements
• Higher Accountancy Costs
• Annual Accounts
• Annual Corporation Tax Return
• Annual Confirmation Statement (£13)
• Payroll and RTI
• Directors Details & Company Financials Available for Public Viewing
• Self-assessment Mandatory for Directors
How to Pay Yourself as a Ltd Company - Directors Salary 2020/2021:https://www.youtube.com/watch?v=1NN3nbatTEo
Are you thinking about setting up an ltd business? What are you thoughts on sole trader vs limited company? Let me know in the comments!