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Limited Company

An organisation that is set up to run your business. You will no longer be wholly responsible for it, business finances will separate from personal finances. Profits made will be subject to corporation tax. Most limited companies are limited by shares, so the shares are owned by shareholders who have certain rights.

If your takings exceed £85,000 per annum, you must register for VAT. Therefore you must maintain annual statutory accounts, send companies house and annual return and provide HMRC with annual tax returns.

The director of a limited company has legal responsibilities for company records, accounts and performance. They also need to:

Limited company vs Sole trader

Mainly held in legal and tax liabilities. A limited company is its own legal entity so shareholders own liability for finances and debts are limited. If you’re a sole trader, business debts becomes your debts and personal assets aren’t protected.

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