A limited company is a company whose liabilities and assets are limited to the shareholders. Here, the assets of the owner, and the company’s, are separate. While there is a limit over the investment on the company’s shares, the owner’s assets are off-limits. In a legal sense, a limited company can be considered a person.
In the UK, the companies with limited assets for others to invest in or hold shares have the term ‘Ltd’ after their name. The limited company has separate shares from the owner’s, so should it go through a loss, there will not be any harm to the private owner’s assets. A limited company has also been passed down to generations. Unlike the public companies, where multiple people have to hold part ownership, the limited company has either of the two limitations. Limited by shares or limited by guarantee. If shares limit the company, only one or two more people hold shares, and the director manages the rest. In case of limited by guarantees, the shares are held by one or two more guarantors and managed by at least one director.
The benefits of having a limited company are:
- Some distinct people run the company
- There is a wall between the finance of the company and the owner.
- They can have contracts signed on their own.
- Any profit earned after the limited company owns tax.
In countries like the UK, the tax for the limited company are value-added tax, capital gain tax, and contribution to the national insurance. Even so, the tax imposed on the limited companies is still favored. And the corporate tax rate is 19%. Now there are two types of limited companies. Private limited company and public limited company. The private limited company is not allowed to open their shares to be invested into the public. These are popular for start-ups.
On the other hand, a public limited company is open for the public to invest or hold on to the shares. This is a tact the company uses to raise capital by trading its stocks. In both cases, the assets or shares accessible to others are separated from their private counterparts.
Now that we know what a limited company, and how it works in the United Kingdom – we need accountants to handle the tax. Even if the tax is favorable to them, it still needs to be paid. And to make sure the company does his due, we need accountants for limited company. The UK accountants for limited companies can be useful in checking the tax and managing the ledger accordingly. Even if the loss does not dent the company, you still need accountants for contractors limited company.
Look for cheap accountants for limited companiesor hire online accountants for limited companies for start-ups. Having contractors limited company can guarantee a secure company, big or small, and its tax dues in the United Kingdom.