02 Aug What are the advantages of a private limited company?
The most obvious advantage that comes to mind is the fact that once you are registered with Companies House, no one else can have your company’s name as it will be protected! Companies can survive for a very long time as their existence only terminates when they are dissolved through formal processes so the name can be protected for a very long time. Another reason to opt for a private limited company is that it can inspire confidence in potential customers and suppliers – it can open up more opportunities as other businesses will recognise the professional nature of your company and may be more likely to work with you, or chose your products and services over other providers. One of the greatest things about incorporating a private limited company is that a company has a separate legal identity so whenever contractual agreements are entered into, the company can enter them rather than the directors or shareholders in their individual capacity. This then leads to separate legal identity which provides security to the shareholder as their liability is limited to the amount they paid for their shares. Limited liability can also extend to unsecured loans if any have been taken on this basis but does not apply in all circumstances. Also, this limited liability is not available to sole traders or partnerships so is it is worth exploring a limited liability company as a potential option for this reason. Having a private limited company can make raising capital a lot easier too especially compared with other types of companies where you would have to raise money using your own personal resources. All you need to do is issue new shares which can be issued to new or existing shareholders depending on what your articles of association allow – we can help you interpret them if necessary. In some cases where the company borrows money from the bank it can do so without the directors having to give personal guarantees over their homes and assets. A private limited company does not need to trade immediately either. It might be that you have an idea for a name but don’t have the time or are working on other things before you get started. If this is the case, you could set up the company and keep it dormant until you start trading. If you’ve been trading for a while and find that your company is thriving but you want to retire or try something new then you can always sell your business if you don’t want to dissolve it. This will give you a nice clean break and some funds to go and do something different. Whatever you chose to do, it is a personal choice but we at M & N Group Limited can advise you on the process for setting up your company. It can all be done online making it extremely quick and easy provided that you have thought about what you want and gathered all the necessary information. The whole process should be completed within a day or so. We can provide you with guidance on the legal, financial and annual filing requirements that you need to comply with and we can even manage this for you. Please get in touch with us today to find out how we can help you succeed!