There are a number of reasons why people choose to form a limited company. One of the main reasons is that you benefit from ‘limited liability’. Shareholders in a limited company are generally speaking only liable to external parties to the limit of their personal shareholding. Other company participants for example directors would not normally have any personal liabilities to creditors, unless there has been wrongful or fraudulent trading or when personal guarantees or other such assurances have been given by them personally or others.
Other reasons might include customers prefer to trade with a limited company, personal tax profit extraction advantages, lower rate of corporation tax.< Back to FAQ's