LIMITED COMPANY
What is a Limited Company?
WHAT IS A LIMITED COMPANY?
A Limited Company is a legally distinct organisation set up to run a business. Unlike Sole Traders or Partnerships, the business finances are kept entirely separate from personal finances, meaning the company itself is responsible for its debts and obligations. Once Corporation Tax has been paid, remaining profits can be distributed to shareholders in the form of dividends.
There are two main types of Limited Companies:
Public Limited Company (PLC) – Shares can be bought and sold on a stock exchange, allowing for external investment and capital growth.
Private Limited Company (Ltd) – Shares cannot be traded publicly, and ownership remains within private shareholders, making it a more controlled business structure.
ADVANTAGES OF A LIMITED COMPANY
Limited Liability Protection – The company is a separate legal entity, meaning personal assets of directors and shareholders are generally protected from business debts. Unique Business Identity – When registering a Limited Company with Companies House, the business name is protected, preventing other businesses from using it. Tax Efficiency – Limited Companies often benefit from lower tax rates compared to Sole Traders, as Corporation Tax is typically lower than higher-rate Income Tax bands. Business Growth & Investment – Limited Companies have greater credibility and access to external funding, such as business loans, grants, and investment opportunities. Shareholder & Employee Incentives – You have the flexibility to offer shares to employees, which can improve motivation and encourage long-term commitment. Continuity & Succession Planning – A Limited Company continues to exist beyond the involvement of its original directors or shareholders, making it easier to sell or transfer ownership.
HOW TEIGN ACCOUNTANCY SERVICES CAN HELP YOUR LIMITED COMPANY
At Teign Accountancy Services, we provide expert Limited Company accounting and tax services to ensure your business remains compliant, tax-efficient, and financially stable. Whether you’re setting up a new company or need professional support for an existing one, our experienced accountants are here to help.
Our Limited Company Accounting Services Include:
Company Formation & Registration – Assistance with setting up your Limited Company and registering with Companies House and HMRC. Corporation Tax Returns & Compliance – Ensuring accurate tax calculations and timely submissions to HMRC. Statutory Accounts & Annual Returns – Preparing and filing financial statements with Companies House and HMRC. VAT Returns & Registration – Helping businesses navigate VAT regulations and meet Making Tax Digital (MTD) requirements. Payroll & PAYE Management – Handling employee wages, National Insurance contributions, and workplace pensions. Dividend Planning & Shareholder Advice – Helping directors and shareholders manage tax-efficient profit distributions. Business Advisory & Financial Planning – Providing strategic advice to help your Limited Company grow and remain tax-efficient.
DISADVANTAGES OF A LIMITED COMPANY
More Complex Accounting & Compliance – Limited Companies are required to submit annual accounts, maintain accurate financial records, and adhere to strict reporting regulations. Public Disclosure of Information – Certain business details, including financial statements, director details, and shareholder information, are available on the public record through Companies House. Restricted Share Trading (Ltd) – Unlike PLCs, Private Limited Companies cannot trade shares publicly, limiting access to external investment.
Potential Conflicts Between Directors & Shareholders – Differences in opinion on business strategy and decision-making can arise among shareholders and directors
