What are the advantages of setting up a limited company? It offers an ideal way to maximise revenues while minimising potential losses, it provides financial accountability and taxes advantages for companies of all sizes and allows businesses of almost all forms to register under the Companies House register. However it can be somewhat time consuming and there are many different options available when setting up a limited company. The best way to overcome this is by enlisting the services of a professional advisor. Such an advisor will make sure your limited company is set up correctly. He will also help you take advantage of limited company formation the many services that are available on the Internet.
If you have decided not to use the services of an advisor but would like to undertake limited company formation without having to pay the high cost of using an accountant then there are still some things you can do at home to speed up the process. The most obvious thing to do is to ensure you incorporate your business at the appropriate tax rates. There are numerous free online calculators you can use to determine how much you should incorporate your company at based on your earnings. This is one of the cheapest ways to set up a limited company and will save you hundreds if not thousands of pounds in corporation tax each year.
One of the other things you need to keep in mind when setting up your limited company is the need for a bookkeeper. A bookkeeper is an accountant who will conduct the day to day financial accounting and enter it into a book kept by the company for tax purposes. He will record the income and expenses of the company and keep accurate records of all transactions. He is responsible for collecting all payments and paying all debts and he is the person who must sign all official documents. You may think you don’t need an accountant but there are several reasons why you should consider employing one to help you register a limited company.
Firstly, if you want to use your own company accounting system then you need a qualified individual to manage it. If you are inexperienced or not experienced at managing your own accounting records then it is unlikely you will have any management skills and in fact quite the opposite. A qualified individual will oversee all matters relating to the day to day running of the company, ensuring all records are correctly recorded and all tax is paid on all earnings. It is extremely important that the firm records are kept correctly as errors in the recording of profits could lead to substantial fines or penalties being incurred.
In addition, setting up your limited company on your own may well be a good idea. Many new businesses fail simply because they do not have a structure in place from the outset and so many potential shareholders simply pass on the investment due to lack of understanding and confidence in the business. If you do not have a properly run company then the level of trust in which you have placed in the company will inevitably suffer and so investors will look elsewhere. Again, this can result in a reduction in share price, lower profits and ultimately the failure of the business.
Limited company guarantors can also be extremely useful when you first register the firm. Without this form of security, it would be impossible for you to raise funds, exchange shares or borrow money for the business. This therefore provides you with the peace of mind of knowing that should anything happen to your business (including bankruptcy) then you will have additional security and a reliable source of income should you wish to do so. In addition, in the majority of cases, shares will be listed on the ASX, which will give prospective shareholders an excellent platform to choose their stock and experience a real-time reaction to the share price. Therefore, the company guarantor can provide essential stability and security to your shares through guaranteeing them at a fixed price until the company is established.