Advantages and Benefits of a Limited Company

FORMING COMPANY IN ENGLAND. UK LIMITED COMPANIES FORMATION BENEFITS

Coddan CPM LTD - specialists in English, Scottish and Irish business start up advice, resources and solutions. With Coddan your business start up idea can literally become a reality in hours! We offer everything a business incorporation or growing business needs right from free advice through to electronic UK limited company registration, Irish company formation and Scottish company establishment, business stationery/business cards, website templates, domain registration, compliance software, virtual offices, accountancy, financial services, trademark registration, marketing, e-commerce plus much more.

You do not have us acting on your behalf as initial nominee company officers. This means you have less paperwork to sort out and it will make the opening of your limited company bank account easier. With our new online electronic company formation services you now have more choice on how we form your limited company. You no longer need to have us acting on your behalf as nominee company officers and shareholders. We can form your private limited company with your own directors, company secretary and shareholders etc., right from the start of your limited company formation.

Clients can verify whether their proposed name has been registered or incorporated and obtain information regarding business entities and not-for-profit organisations operating in England, Scotland and Northern Ireland by conducting corporate name and unincorporated business name and limited partnership searches of the UK public record. The Companies House records the name and company number of UK corporate entities that are incorporated, continued, amalgamated or licensed to do business in the United Kingdom. The public record is comprised of companies, which conduct business for profit as well as not-for-profit organisations such as charities.
Finding and Using Information on This Page:  UK Private Limited Company Formation Benefits | Benefits of Starting Your Own Company | Limited Liability - What Does It Really Mean? | Limited Company Advantages & Disadvantages | 

Our Service

We provide a fast online service for company registration, LTD company formation, and business incorporation in England, Wales and Scotland. When first setting-up a business there are many issues to consider. You need to decide whether or not to incorporate your business, and to choose a structure for your business. There are several types of legal business entities which you can choose to operate as. For more information on these choices, follow the links below. We advise that professional legal and financial advice is obtained before a final choice of business entity is made. Sole Trader (Self-Employed) Limited Company Public Company Company Limited by Guarantee Limited Liability Partnership Branch or Place of Business Coddan is a leading service provider in the field of English, Scottish and Irish company formation and company registration. We can help you in starting a business in England & Wales Scotland and Northern Ireland. Over 95% of our companies are incorporated within 6 hours. The electronic submission of information enables a fast company start-up satisfying all of the required legal formalities: a director, a secretary, a registered office and shareholders. Our electronic filing software has been approved by Companies House.

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With our E-Quick UK LTD Company, you can choose the name your require, as long as it's not already in use. You advise us of 2 possible company names you would like. We will then check the names to see if they are available. The name check service we offer is free of charge. You must remember certain words are classed as sensitive and cannot be used. (i.e. Royal, Charity, Britain, Post Office) unless you justify them. Once your company name has been decided we then form the company for you. We use a share capital of £1,000 and standard Memorandum and Articles unless advised differently by yourself.
Creating a Company in the UK:   How Do We Form Your New Ltd Company? 

Why UK & Irish Limited Companies are Used to Trade in Europe?  
The principal reason that British & Irish companies are popular in Europe is down to a number of reasons; but in particular their popularity is due to the fact that British and Irish corporate taxes are low whilst limited companies do not need to be capitalized as is required by law in all civil law countries from Portugal in the South to Sweden in the Far North.

This, plus the fact that UK companies can be formed electronically in hours (In Ireland the incorporation process takes 5-10 days but can be executed online) and further that European Union (EU) Directives/Regulations prevent discrimination against any EU company operating within another EU country make UK and Irish companies very attractive.

Understanding Why and How UK and Irish Branches Work:  
All UK and Irish limited companies are deemed tax resident in the UK or Ireland unless covered by a Double Taxation Treaty (DTT) - It is a common misconception that UK companies trading outside the UK do not need to adhere to UK domestic company laws. This is not true, ALL UK and Irish companies need to maintain UK or Irish accounts, make submissions to the Inland Revenue (Revenue Commissioners) and reply to standard statutory enquiries from Companies House (the Companies Registration Office).

However, if for example the UK/Irish limited company has a branch in Germany then the zweignniederlassung under the DTT will be subject to German taxes but controlled by UK laws. Thus, if the UK company does not trade in the UK/Ireland but has an active branch in Germany only German taxes will apply.

Using Managed UK or Irish Limited Companies to trade Directly with Europe:  
Such companies are used by Continental Europeans because apart from the low cost of registering a UK (Irish limited companies are more expensive but not nearly as expensive as registering a German gessellschaft mit beschrankter (gumbo)) limited company the UK also has much lower corporate taxes (starting from around 19% p.a. or 12.5% in Ireland) and social taxes.

Again, such trading companies cannot be discriminated against in Germany or other parts of the ECU but to be accepted hey must show MANAGEMENT & CONTROL in the UK and NOT GERMANY. To do this the company must be registered for VAT and be really managed in the UK by, for example, our in-house accountants. Thus service legally requires us to operate a UK bank account and make quarterly VAT returns to the Government (Customs & Excise). Cost wise, a FULLY MANAGED UK company will cost a few thousand euros each year but can save 10,000's compared to running a German Gumbo or French Serial.

Anti-avoidance provisions and the benefits of using Managed and Controlled UK or Irish limited companies. Unlike tax havens, it is almost impossible for either the French, German or other investigating tax authorities to discriminate against properly managed UK or Irish companies for the very simple reason that both are highly respectable European Union countries.

The only issues that can technically be raised relate to proving that there is a genuine business reason other than simple tax mitigation - obviously, this burden can normally be easily satisfied due to the importance and size of the countries involved but it cannot be over-stressed that full and proper management must take place in the UK or Ireland to derive these benefits.

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UK LTD Companies from only £32.00! All Inclusive Company Registration. Each limited company package includes all statutory paperwork and is fully compliant with company law. All our private UK companies are general trading companies and can be used to conduct any type of business. A Certificate of Incorporation, and the Memorandum and Articles of Association of your company will be sent to you upon formation of your company. You can appoint your own directors and secretary BEFORE company incorporation. This is absolutely FREE. Our 4-8 hour online incorporation service enables you to register your company quickly and effortlessly. All government and filing fees are included in the cost of our E-Quick pack. All certificates and documents will be sent directly to you via email immediately following the formation of your company. It will take just 5 minutes to complete the online registration form, then your company could be up and running within 4-8 working hours. THE E-QUICK PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES: 1. Company Pliers Seal - £20.00. 2. Laminated Hard-copy of the Certificate of Incorporation - £5.95. 3. Laminated Hard-copy of the Certificate of Incorporation, Bound Copies of the Memorandum & Articles, and Combined Company Register - £12.95. 4. Domain Name Registration for two years - £16.00. 5. Provision of a Registered Office Address for 12 months - £50.00. 6. Provision of a Nominee Company Secretary for 12 months - £49.95. 7. Certificate of Good Standing - £35.00. 8. Notarisation & Apostille of Documents. Call any one of our offices: Monday - Friday: 9:30am to 17:30pm +44 (0) 207.935.5171 +44 (0) 800.081.1510 +44 (0) 141.530.8188 +44 (0) 289.099.8744 info@ukincorp.co.uk

UK PRIVATE LIMITED COMPANY FORMATION BENEFITS. INTRODUCTION

Before your business can begin operating as a limited company, it has to be registered with the Registrar of Companies (Companies House). Incorporation is the process by which a new or existing business is converted into a corporate body. This doesn't have to be a complex and costly process, but you'll need to be clear about a few things before you start.

You can handle the registration process yourself, but it is a good idea to seek professional advice before you do so to ensure that incorporation is right for you. A company formation agent, solicitor or accountant can carry out the process for you, for a fee, as well as offer advice.

BENEFITS OF STARTING YOUR OWN COMPANY

Anyone who operates a business, alone or with others, may incorporate. Under the right circumstances, the owner of any size business can benefit! The decision to start your own company will vary, depending on the needs of the business and yourself. Consider the following benefits of incorporation:

Reduces Personal Liability:
Incorporating helps separate your personal identity from that of your business. Sole proprietors and partners are subject to unlimited personal liability for business debt or law suits against their company. Creditors of the sole proprietorship or partnership can bring suit against the owners of the business and can move to seize the owners' homes, cars, savings or other personal assets.

Once incorporated, the shareholders of a company have only the money they put into the company to lose, and usually no more. The bad debts will often be the responsibility of the corporation. In the case of bank financing, more and more banks require business owners to sign a personal guarantee; making your personal assets collectible on a defaulted loan. Consider your options before signing.

Adds Credibility:
A company structure communicates permanence, credibility and stature. Even if you are the only stockholder or employee, your incorporated business may be perceived as a much larger and more credible company. Seeing "LTD" at the end of your business name can send a powerful message to your customers, suppliers, and other business associates about your commitment to the ongoing success of your venture.

Easier Access to Capital Funding:
Capital can be more easily raised with a corporation through the sale of stock. With sole proprietorships and partnerships, investors are much harder to attract because of the personal liability. Investors are more likely to purchase shares in a company where there usually is a separation between personal and business assets. Also, some banks prefer to lend money to limited companies.

An Enduring Structure:
A limited company is the most enduring legal business structure. Companies may continue on regardless of what happens to its individual directors, officers, managers or shareholders. If a sole proprietor or partner dies, the business may automatically end or it may become involved in various legal entanglements. Companies can have unlimited life, extending beyond the illness or death of the owners.

Easier Transfer of Ownership:
Ownership of a company may be transferred, without substantially disrupting operations or the need for complex legal documentation, through the sale of stock.

LIMITED LIABILITY - WHAT DOES IT REALLY MEAN?

First and foremost, the principal benefit of trading via a limited company has always been the limited liability bestowed upon the company's officers and shareholders. As a sole trader or other non-limited business, personal assets can be at risk in the event of a failure of the business, but this is not the case for a limited company.

As long as the business is operated legally and within the terms of the Companies Act, directors' or shareholders' personal assets are not at risk in the event of a winding up or receivership. And as often happens on occasion, such events are not always under our own control. Operating as a limited company often gives suppliers and customers a sense of confidence in a business. Quite often, larger organisations in particular will prefer not to deal with non-limited businesses.

Many of the costs associated with managing and operating a limited company are no longer much greater than with a non-limited business. Accountants and other professional advisers often have conflicting views on when they consider the benefits of being limited to outweigh the advantages of being self-employed. In general terms, at least from the perspective of taxation and accountancy, changes to legislation over the last few years have meant much lower costs associated with limited companies.

Recent changes to corporation tax have further enhanced the attractiveness of operating as a limited company, and proposed changes to the Companies Act due to be introduced possibly in 2003 will simplify much legislation relating to limited companies.

There is no obligation for a limited company to commence trading within any set time period after its incorporation. This means that the formation of a limited company is one simple and low cost method to protect a business name. Whilst this does not in itself give any rights to use of the business name, many clients form companies in anticipation of future development of new businesses or in order to protect the limited company name of an existing non-limited business for the future. No two limited companies can exist with exactly the same name.

If a limited company becomes insolvent and is wound up only the assets of the company are used to try to clear its debts. The officers of the company have no personal liabilities, and are not made bankrupt, and are free to form another company. However, the shareholders are liable only to the extent of any unpaid shares held.

By contrast, if you trade as a partnership or as an individual, the creditors can claim on all your property to satisfy the debts, and if this is insufficient you may be declared bankrupt. An undercharged bankrupt is forbidden to start another business or to become a director of a company.

LIMITED COMPANY ADVANTAGES & DISADVANTAGES

You may wish to change your unincorporated business into a company or add another company to your group. Alternatively, you may consider that now is the time to move from private company (LTD) to public company (PLC) status. In addition, it is necessary from time to time to carry out administrative changes in respect of a company' such as altering its' name, registered office or accounting reference date.

A limited company is a legal entity separate from its individual members. A company must be registered at Companies House and has to file annual returns and other returns notifying any changes in its registered particulars. A company must also file accounts annually.

Your first decision is whether to form a company or to trade as an individual or a partnership. The critical factors are usually: Corporation tax payable on company profits may or may not be more favourable than the income tax payable by you on earnings as an individual. This will depend on circumstances. It helps to trade without unlimited personal liability to creditors. Liability is limited to your capital-contribution in a company. Wrongful trading or fraudulent trading can render directors personally liable for their company's debts and directors may in practice have to give personal guarantees.

Company status may be desirable in giving your business a level of credibility that trading under your own name(s) or other trading style may not provide. Registration requirements mean that details of your company will be accessible to the public. The administrative burden of operating a company is heavier. Companies can be used to own business with a degree of continuity and allow a number of different persons to participate in a simpler format than a partnership. Companies provide a convenient method to give an objective value to a business and to create an entity that can be sold as an asset.

United Kingdom limited company advantages: limited personal liability. The members of the company are only liable for the company's debts up to the value of their shareholding or guarantee. Improved National Insurance benefits. Easy to transfer interest in business through ownership of shares. Strong structure and procedure for resolving disputes between members of the company.

United Kingdom limited company disadvantages: strict legal controls under the Companies Acts requiring filing of annual accounts (which must be audited in most cases) and other documents. Public disclosure of information regarding the company through Companies House registration. Directors of the company have to comply with legal standards of care in conducting business. Directors can have personal liability in certain circumstances (e.g. if a company is wound up). Because of its limited liability, directors or members of the company may have to give personal guarantees to banks and landlords. Higher National Insurance costs.