Limited Companies Accountancy Advice
One business trading option for a Peterborough (or any location) business is to operate as a limited company. This provides access to many tax planning strategy benefits and also provides a limited liability status. Obviously there is a perceived kudos in operating your business as a limited company but you will undoubtedly lose some of your privacy – directors’ and shareholders’ personal details and abbreviated accounts have to be filed and are open to public scrutiny and observation.
How Does Limited Liability Status Work?
Your company is a separate legal entity and this protects your personal assets from business creditors if for any reason your company is not able to clear all of its debts and as a result has to cease trading. Operating in such manner is useful if there are huge risks associated with your business activity.
What are the disadvantages of going Limited?
You could have double taxation – Your company pays corporation tax on its profits and can only distribute the remaining profits, also known as retained profits, to directors and shareholders. This could possible mean a rise to tax being paid by both the company and by the directors or the shareholders when they take money from the company.
More cost to you (not a lot) – Pofessional costs for setting up the company and for preparing company accounts and tax returns can be higher due to the complexities compared to being self employed. There are also additional costs involved with various Companies House requirements.
Your will be subject to Audit requirements – If your company exceeds a certain turnover, or is in a specific trade sector, an audit may be required and will incur more costs costs. At Stonehouse Accountants in Peterborough we can advise on this, but most small companies will be exempt from annual audits.
We have the experience (over 30 in fact) to guide you safely through he area of going Limited and will assist every step of the way. Call Stonehouse Accountants Today on 01733 265888.