Benefits of setting up a limited company

When you set up a business, one of the decisions you need to make is whether you will operate as a limited company or a sole trader. Setting up a limited company can appear daunting but does have some advantages that you need to consider.

Limited liability

Although when you set up a business, you are full of hope and self-belief, the truth is that things can go wrong in business. Limited liability protects you if things do go awry as you will not be personally liable for any losses made by your company. This is because the company is a separate legal entity in its own right with its own bank account, assets and so on.


Companies and individuals you do business with may see you are more professional if you are operating as a limited company. Some people will have a business policy of never dealing with sole traders or partnerships. So to an extent, establishing yourself as a limited company can be a marketing tool.

You company name

Once you have successfully registered your company with Companies House your company name is protected by law. They have  very strict rules for the naming of companies so no one else can use the same name as you, or anything deemed too similar. If you know you are the only person operation with your company name, you know you will always stand out and other businesses will not be able to pass themselves off as your business.

Transfer of ownership

When you start a business, succession may not be on your mind but establishing a limited company offers protection for future events too should you wish to transfer ownership in your company to others. This means you or other shareholders in your business can retire easily when the time comes or move on to pastures new without threatening the business.

You should also look into the pay and tax advantages of setting up a limited company which can make you far better of financially. To work out which legal structure of business is best for you, go to the One Click Group which will help you work out the right answer for your individual business.

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