While discussions around inflation, budget cuts, job losses, etc., are becoming common in the UK, its business landscape is still growing at a steady pace. Talking with the top accountants in London will reveal how numerous smaller businesses are emerging in different parts of the country, and those with side hustles are displaying promising growth. Such scenarios call for taking the next big step and giving these businesses a legal status via company registration.
In the UK, businesses can register their startup business as a limited liability partnership, sole trader, partnership, and limited company. While each registration has distinctive benefits and disadvantages, a limited company emerges as the best option for most growing startups. If you plan to register your startup under an appropriate legal status, read the following benefits to understand why proceeding with the limited company registration can become your best decision ever.
- Get Limited Liability Protection
The biggest benefit of registering your startup business as a limited company in the UK is safeguarding your personal assets and valuables against potential insolvencies in the future. While every founder gives their best to sustain their business in the long run, there is never a guarantee that the company may never perform poorly or even fail.
Registering a business as a limited company is especially recommended when entering uncertain markets or developing untested or entirely new products. Even if the business fails, your liability will be restricted to the amount you invested in the company, and your personal assets, like your home, savings, personal belongings, etc., won’t be attached to cover any losses or dues.
- Enjoy Numerous Tax Benefits with the Help of an Accountancy Firm in London
Anyone doing business in the UK can enjoy plenty of tax-saving benefits by registering their startup as a limited company. These companies pay corporation tax on their profits, which is much lower than the income tax rate levied on an individual’s income (especially the high earners). You can consult the best accountancy firm in London to compare the difference in taxes paid and understand why registering your business as a limited company is the most lucrative option.
Since limited companies can deduct tax-approved expenses from their revenue like office rent, staff salary, travel expenses, etc., their revenue eventually becomes lesser and attracts lesser tax liabilities. Those operating as solo traders don’t get the benefit of deducting their business expenses, resulting in higher tax liabilities.
- Better Credibility and a Strong Professional Image
Registering your business as a limited company can instantly add credibility, making more investors, clients, partners, etc., willing to work with you. Once you attach the ‘Ltd.’ suffix to your company name, it signals that you’re operating a legal business and are serious about the establishment. Many public sector bodies, businesses, etc., prefer working with registered companies because they’re considered more stable, reliable, and professional.
- Receive Greater Access to Funding
Limited companies can secure funding for their operations by issuing shares in exchange for capital. It is an excellent way to attract angel investors, venture capitalists, etc., to invest in your business. Since limited companies are also eligible for numerous government grants and schemes like R&D tax credits, innovation grants, etc., you can significantly reduce your tax liabilities and open newer avenues for sourcing funds.
You can also get easy bank loan approvals because of the company’s strong legal footing. All this can help you scale your business faster than ever. Ensure your business financials are on-point to ensure you become the first preference for grants, loans, funding, etc. It can be achieved by hiring the best accountants in London so they focus on streamlining the accounts, and you give your attention to more strategic initiatives.
Take Your Business to Newer Heights with a Limited Company Status
Registering your business can massively change its trajectory, enabling you to reach places you never imagined. Not only will it protect your personal assets and other valuables, but will also help you enjoy greater tax benefits. If you want your business to be taken seriously by others, getting it registered as a limited company can be beneficial. So, contact a reliable formation agent or accountant with relevant expertise and convert your business into a registered legal entity.
