7 of the Best Reasons to Register a Limited Company (UK)
From managing your tax to attracting outside investment, there are plenty of good reasons to register a limited company. And in this article we introduce you to our top 7.
1. Managing your tax
Limited companies pay corporation tax which is lower than the income tax paid by sole traders and partnerships.
As a director of a limited company, you can also take money from the company as dividends rather than a salary, which can be more tax efficient. A salary is subject to employee and employer National Insurance contributions, and you don’t have to pay this if you take a dividend.
What’s more, a limited company is able to claim more in allowable expenses and reliefs than a sole trader or a partnership. There are tax deductible costs which you can offset against a company’s profits, meaning you get to keep more of your money.
2. Protect Your Personal Assets
Many new businesses end up trading at a loss and need to borrow money from banks or in the form of stock on credit from suppliers. If the business can’t pay the money back it will be wound up and all the assets sold to pay back the creditors.
But, when you register a limited company, your personal assets, such as your house and car, be protected. That’s because limited companies are separate entities in the eyes of the law.
3. Attract Outside Investment
If you have a solid business plan, the decision to register a limited company could attract investors keen for a share of the profits.
As the company director, you have control over how you allocate shares and what influence the shareholders will have on how the company’s run. It’s an attractive option if you need an immediate injection of funds and business expertise.
4. Gain Exclusive Rights to Your Company Name
When you register a limited company, the name of your business is placed on the public register held by Companies House. That means it’s yours for as long as the company remains in existence.
Check if your company name is available
5. Polish Your Reputation
The decision to register a limited company (UK) demonstrates that your business is going to stick around. This should mean that suppliers will be more willing to extend you credit.
6. Build for the Future
If your limited company is funded by shareholder capital, you will be in a better position to plan for the long term than if you had sought loans from a bank. While shareholders accept that they might not see a return on their investment in the short term, a bank will be less patient.
7. Become a Serial Entrepreneur
Are you full of business ideas? Then why not register a limited company and sell it on when you get an attractive offer? This could be just your first company of many.
Register your own business from £9.99
Check out our helpful links
Our simple process
Find a name for
your company
Choose the bundle that's right for you
Purchase your
bundle online
Fill in a few details and we'll do the rest
Customer reviews
A trusted provider for all businesses
Rated 4.7 out of 5
Rated 4.6 out of 5
Rated 4.2 out of 5
Formation bundles to suit all businesses
Upgrade for support and peace of mind
Get up and running with everything you need to start and run your business. Subscribe and let us take care of your on-going filing requirements.
Continue with one-time purchaseUpgrade for support and peace of mind
Get up and running with everything you need to start and run your business. Subscribe and let us take care of your on-going filing requirements.
Continue with one-time purchaseTax and accounting
Get access to Crunch bookkeeping software for free as well as exclusive discounts with other market leading software providers.
Registered agent
Included with this bundle
A 3 in 1 service that protects your privacy, all other directors privacy and includes our mail forwarding service.
Registered office address:
On the public register, use our address as the business’s registered office address
Service address:
On the public register, use our address as all the directors service address
Mail forwarding:
Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.
Registered agent
Free for 3 months with this bundle
A 3 in 1 service that protects your privacy, all other directors privacy and includes our mail forwarding service.
Registered office address:
On the public register, use our address as the business’s registered office address
Service address:
On the public register, use our address as all the directors service address
Mail forwarding:
Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.
Registered agent
Free for 12 months with this bundle
A 3 in 1 service that protects your privacy, all other directors privacy and includes our mail forwarding service.
Registered office address:
On the public register, use our address as the business’s registered office address
Service address:
On the public register, use our address as all the directors service address
Mail forwarding:
Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.
Legal and finance
Protect your business legally and financially with:
Company credit checks:
Carry out company credit checks powered by Experian's most comprehensive and current credit data to make sure you're doing business with the right people by picking the right customers and securing your supply chain.
Company credit monitoring:
Monitor all your key customers and suppliers credit statuses and get email alerts of any significant changes. Make sure your customers can pay what they owe and your suppliers can deliver the goods they promise.
Debt recovery Toolkit
Manage all your customers' credit in one place. Download and send different payment chasers, reminders and monthly statements to make sure that invoices are paid on time and in full.
You can send a solicitor final warning letters and even take court action to recover what you're owed!
Legal Documents:
Easily create all the legally enforceable contracts, documents, policies and procedures your business could need to sing the simple, straightforward document creator wizard.
Safely store all your documents online, where you can access them wherever and whenever you want.
Legal Health Check:
Complete the simple question-answer form and discover exactly what documents your limited company needs to be legally protected.
24/7 Legal Advice:
Get legal support and advice when you need it. Access an extensive library of legal how-to guides, news bulletins of all the most recent legal developments and a 24/7 telephone support helpline.
Knowledge hub
The Formations Company and Companies House
What is a Private Limited Company?
How long does it take to register a new company?
When should I change from sole trader to limited company?
Limited Company Vs Sole Trader: Advantages and Disadvantages
