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    What are the advantages and disadvantages of a UK Limited Company?

    There are more entrepreneurs now than ever, and it’s also easier for those who may not have dabbled in business before to secure a company name by forming a UK Limited Company. You might be interested in having your own business, but perhaps you’re not sure if private limited companies fit the formation you require the most, and whether you should be setting up a limited company in the UK.

    Let us guide you through the limited company advantages and disadvantages of why now is a better time than ever to begin your UK limited company registration.


    Advantages
    1. Private limited companies are the most common company type in the UK. Having a private limited company means that there may be less restrictions (the most common being that a Private company is usually intended for the purpose of those involved with the company, whereas a Public company is also intended for public investment and can be listed on the Stock Exchange).
    2. The company formation process can be made quick and easy. You will need to fill in forms in order to form the company (which will be accepted by the official body for company formations, Companies House) and will need to know information of who the Directors and Shareholders will be. You are able to cover all roles in the company, so owning and running a company yourself is fine. There are company formation agencies who are able to simplify the limited company registration stage, and are able to offer greater explanation and customer support if needed. Other services they offer also often tend to be cheaper than some accountancy services.
    3. If considering a UK company formation over a formation in another country, consider this - it’s usually quicker (the company can be formed in as little as 3 hours), there’s may be kinder tax implications, cheaper to set up and less forms. Of course, we would always advise seeking professional advice when it comes to taxes.
    4. The best benefit to setting up a limited company is that the liability you have in the company is just that - limited. This means that running or owning the company doesn’t necessarily mean you are liable for the assets when the company gets into debt, for example.
    Disadvantages
    1. If you have never set up a company before it can be a bit daunting - so do get as much information as you can before you decide to form one.
    2. There are filing obligations each year - even if you aren’t trading or doing anything with the company. So even if you are just looking to reserve the company name, you will have to file information each year - such as a Confirmation Statement and Annual Financial Accounts (or Dormant Company Accounts if you haven’t been trading). But fear not, these can be easy to file, and there is help available in the form of accountants or company formation agencies.
    3. You will need to pay to get help or advice for your business - especially if someone will be filing one of the obligations for you. You may be able to get basic information from Companies House, but for more in-depth information it’s always advised to speak to someone in that professional field.
    4. While it’s not so much a disadvantage, you will need to make sure you read over everything properly. One mistake could be costly - for example, if you spell a Shareholder name wrong, the only way this can be changed is via a Confirmation Statement filing, which also doesn’t update automatically.
    5. You are obliged to be as transparent as possible, so details such as Director and Shareholder information will be made available online, including some address details. If you don’t yet have an office and aren’t comfortable with your home address appearing online, you could use an accountants or could find a reputable company formation agency who can provide a service for an official Registered Office Address (for your company) and Service Address (for the Directors, Shareholders and PSC’s).
    All in all, the limited company advantages and disadvantages balance themselves out. Setting up a limited company, especially the limited company registration process, is easier than ever. Whilst your records do appear online, you are able to use an accountants or a formation agencies address instead - this is perfectly legal to do so. 

    But you also get the added benefit of knowing that your own personal assets will not be liable if the company goes wrong - only what is invested in the business. Private limited companies are the most popular formation, but always seek as much advice as you can before setting up a limited company.

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