A Private Limited Company, sometimes simply called a Limited company, is the most common type of UK incorporation service requested.

When you form a Private Limited Company, at least one share must be issued. The limited company can be created with any number of shares — of any value.

What are the Advantages?

There are several reasons why more individuals choose to register private ltd companies.

The advantages of a private limited company include:

  • The company’s finances are separate from its owner’s finances.
  • Protection from personal liability to Limited company owners.
  • It is easier for a Private Limited Company to borrow money, raise capital and achieve financing without personal risk.
  • Various tax planning opportunities exist which can be tailored to your circumstances where applicable, to deliver significant tax savings.

What are the Disadvantages?

  • Private Limited Companies must hold annual meetings and the shareholder and directors have specific formalities to observe.
  • Owners of the limited companies have less personal control over the company compared to sole traders due to compliance issues.
  • Because of the range of statutory obligations, there are usually higher accountancy costs if you don’t get things right, higher financial penalties.

Registered Office of a Private Limited Company

All private limited Companies must have a registered office in their country of incorporation. This does not have to be the business address; it can be the address of the ltd company’s accountant or lawyer. This address is important: this is where all notices and government correspondence is sent.

By using our address as your company’s registered office address, you will retain your personal address privacy, you will avoid changing the address of your company every time you would like to move houses.

What is more you will make sure that all essential documents from HMRC are directly send to your Accountant.

All UK limited companies are subject to Corporation Tax. The tax is charged as a percentage of the annual profits made by a company.

Corporation Tax is not paid by businesses operating as sole traders or partnerships. The individuals running such businesses are classed as self-employed and will pay tax on their business profits through the annual self assessment system. Each year, your company is required to complete a corporation tax return (Form CT600). All corporation tax returns must now be filed with HMRC online.

Although Right Choice Bookkeeping Services will prepare and submit the CT600 and supporting documents, you must ensure that the information is correct.

What is more, at the end of a financial year, every limited company must prepare and send a ‘confirmation statement’ (annual return).

You can be fined up to £5,000 and your company may be struck off if you don’t send your confirmation statement.

May 2024