Many people choose to form a Limited company because of the following reasons:
As a Limited company the personal assets of the shareholders and directors are not at risk should the company go out of business. This means that they are protected if the company was to face receivership or a winding up petition, which would not be the case if they were acting as a sole trader or non-limted company.
Operating as a Limited company can improve the credibility your business has with your customers and suppliers.
No two Limited companies can have the same name, which avoids confusion when trading commences.
Limited companies are typically cheaper to run in terms of accounting fees and taxes. However, it is best to consult an accountant on this point before going ahead.
There may be tax advantages for high earners who are able to keep money in the business or put money in a pension scheme.
Limited companies can remain dormant for an infinite amount of time, meaning that you are able to protect a company name.
It is easier to secure additional funding through shareholders and banks.
Ownership of the company can easily be changed through the sale of shares.