Benefits Of A Limited Company And Its Registration

The formation of a limited company is a brilliant idea as it is a benchmark of the heights your business has reached and it also provides you respect in the market. However, there are other major benefits of having a limited company. The greatest advantage of having a limited company is the limited liability status that you receive. Therefore, if your company goes into receivership, the directors and shareholder's assets are normally not at risk.

There are many advantages of a limited company like shareholders can decide when to extract money and how to extract the money: as salary or dividends. You can save money by choosing the right mix of salary and dividends.

It is mandatory for sole proprietary and partnership firms to pay tax on the whole income which means that in good years you are charged at higher rates of tax. As a company you can spread out the payment and thus reduce the overall tax rate.

If you want to protect your business name, register it as a limited company name as no two limited companies can have the same name. Although you may also want to further protect it by registering it as a trade mark.

As your company is limited, there is an improved status amongst customers, employees and also suppliers. Your status makes it easier to do business and will ultimately flow through in to making more profit.

Limited Company Registration Process

There are many websites that provide cheap and straightforward ways to form a limited company. Here are the steps:

Complete a memorandum of association made, this contains the names and signatures of the subscribers that wish to form the company and, in the case of a company limited by shares, a commitment by the subscribers to take at least one share each.

Create the standard article of association and make sure it complies with the companies ACT 2006. These articles establish the rules made to carry out the internal affairs of the company.

The Company owner will also have to fill out Form In01, which has details of the directors, secretary and registered offices and a statutory declaration that the company will abide with all the legal requirements involved in the limited company's incorporation.

You will be required to pay a fee of 20 for forming a limited company. However, there are premium services where you get incorporation done on the same day by paying 50.

None of the above forms are available for free and you need to buy them at a legal stationary. If you think that this is a complicated process, then there are other ways to get your company registered as a limited organization. There are many company formation agents who specialize in carrying out such a process and ensure that there is no delay. Depending on the agent you choose you pay more or less for a service which is very much the same. Do make sure you obtain also share certificates as it is a legal requirement to issue these too many agents do not offer these.