The choice of business vehicle is important at the start of the business. It is of course possible to actually change the nature of the trading vehicle, but it is not as easy as determining the vehicle at commencement.
Additionally, if the vehicle is changed at a later point such as starting in business as an unincorporated business and later incorporating the business, there may be significant tax costs depending upon the value of the business.
Although there may not be income tax consequences, there may be significant capital tax consequences based upon the value in the business. Although there are reliefs such as incorporation relief in capital gains tax, there may be liabilities coming into existence as a result of the change in the vehicle. Hence, considerable effort must be devoted at commencement to the right choice of vehicle.
Most small UK companies set up as a private limited company (LTD), but every business is different, and you may feel stronger as a public limited company (PLC). The main benefit of setting up this way is the increased financial protection it provides, since you won't be personally liable for any losses your company makes. The owners of a limited company are only financially responsible for the money they've invested, and this is the perfect solution for freelancers who either want to expand their business or simply make it more professional.
As a company you can benefit from the following which are not available to sole trader or partnerships.
Equity investment - tax efficient equity investments such as SEIS, EIS and VCTs.
Employee Share Schemes - Tax efficient tax schemes such as Enterprise Management Incentive, Share Inventive Plan etc
Research and Development tax relief - Innovation and research and development tax relief is only available to limited companies.
Further advantage of the limited company is the ability to create different classes of share, which might have different rights as to shares in profit, voting, preference with regard to dividends or liquidation. This also helps in control, and succession planning.
We provide an all-inclusive service which helps you to get set up, improve profitability and grow your business as a Limited Company owner, giving you greater peace of mind and letting you concentrate on doing what you do best. With years of experience providing expert financial advice and support to owners of limited companies.
We offer services of - please link them with services
Incorporation of business - exiting and new business
Registration for taxes
Research and development tax credits
Tax efficient funding
Employee Share Scheme
Budgeting and forecasting
Year-end statutory accounts
Corporation tax return
Require more information?
If you would like more information or would like to speak to us, then call us on 0208 050 4073 or if you prefer to contact us.