Why should you choose a Limited Company for your business?
At JP Egan & Company, we know that deciding whether to run your business as a limited company is a significant decision. Limited companies offer numerous benefits but come with their own set of responsibilities.
Understanding these factors is crucial in ensuring you’re making the right choice for your business, and we’re here to help you every step of the way.
Advantages of a Limited Company:
Limited companies can offer significant advantages for your business, including:
- Protects personal assets: Running your business as a limited company separates your personal assets from business liabilities, offering you much-needed protection in case of debts or legal issues.
- Attracts investors: With reduced risks, limited companies are more appealing to investors, making it easier to secure funding for growth.
- Enhances professional image: A limited company offers more credibility, especially when dealing with larger clients or suppliers.
- Simplifies ownership transfers: Selling or transferring shares is easier in a limited company structure, which is especially important for succession planning.
- Financial security: Limited companies help businesses plan for long-term success, offering opportunities for tax relief and ensuring greater financial stability.
- Business growth: The limited company structure is more conducive to expansion, making it easier to hire employees, form partnerships, and raise capital.
Disadvantages of a Limited Company:
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Higher setup costs: Setting up a limited company involves more administrative costs, including registration, accounting, and legal services.
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Less privacy: Limited companies must file certain details with the Companies Registration Office (CRO), including financial statements, making the company’s affairs more public.
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Stricter rules: Limited companies have to comply with more regulations, including limits on how they can spend company funds and the need for annual accounts and audits for larger firms.
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Inability to offset personal losses: Unlike sole traders, you cannot offset personal losses against company income.
Simplifying the Complexities of Limited Company Management
