Accountants in Reading

A Limited Company will give you many more options than the Partnership and Sole Trader offer; however, there are some disadvantages to go along with the advantages. Accountants in Reading can guide you in setting up your Limited Company while ensuring you take advantage of every tax strategy available to you.

Advantages of operating as a Limited Company.

• You have limited personal liability to the company. This means that should your business fail, you will not lose your personal assets to cover the debts. If the business is risky, you might want to consider the Limited Company option.
• There is a higher perceived status or prestige to Limited Companies.
• Funding and financial backing is often easier to obtain for a public company.

Disadvantages of operating as a Limited Company:

• Since the company operates on a public basis, the company must pay taxes on the net profit. When a director or shareholder withdraws funds as income, they must pay personal tax on that amount. Therefore, you are effectively have double taxation on all monies paid out as income.
• Managing a Limited Company is much more complicated and, therefore, more costly to run. You will need to hire out the services of accountants and lawyers to deal with the accounts preparation and Companies House on your behalf.
• Once your company reaches a certain size, it will require an audit which can be costly.
• All Limited Companies require transparency of profits and income. All shareholders’ and directors’ financial and personal accounts must be filed and made public. Anyone can research to find our exactly how well or how poorly your company, and yourself are doing financially.

While there is a bit more involved in setting up and managing a Limited Company, Reading Accountants can help you every step of the way and advise you on all financial and taxation matters.