There are multiple benefits in favour of forming a limited (Ltd) company. The most prominent being 'Limited Liability'. Most businesses which operate as Sole Traders or most Partnerships have the downside that, should they fail, the directors assets are bound within the company and Creditors are able to claim this. With a limited company, this is not the case. Only the companies property and/or assets can be taken. Another appealing factor is that directors and shareholders have no personal liability to the company whatsoever (unless the company failed due to their own malpractise and/or misconduct). There are also no restrictions on the pursuit of forming another company.
Tax concessions are also available to limited companies compared to that of other varieties which have tax divided amongst the partners. Profits in all businesses are entitled to taxation, but with limited companies this tax is subject to a lower rate. Normal personal allowances against income are also available for Directors to claim.
Limited companies also carry the benefit that they are identical. No two are allowed the same name! This is greatly favoured over Sole Traders and Partnerships which, unfortunately, are unable to assure your business name is unique.
Ownership of limited companies is easily distinguishable also which eases the the proceedures of valuing, buying and selling the business. Owners are listed along with their percentage share of the company they own. These shares are easily transferable via selling or simply by giving away. Company variants such as Sole Traders suffer in this field as, when an owner dies, so does the business. Limited companies however are simply registered over to a new Director or Secretary.
With this all in mind, it should lift all burden of choosing which variety of company/business is for you.
