When it comes to company registration in the UK, there are essentially two types of limited company. A company that is publicly traded on the stock exchange is a public limited company or a â€plcâ€, whereas a company that is owned privately is identified by the â€ltd†at the end of its trading name. Most people starting their own business are only involved in limited company formation (ltd). Ltd Vs Sole Trader A limited (or limited liability) company is different to a sole trader. A sole trader or a partner can be held personally liable, meaning any outstanding debts can be met from personal assets. More legal administration is required in limited company formation than a sole trader business or partnership. However, unlike a sole trader business where the business owner is personally responsible for any debts, a limited company is a separate legal entity to the company directors. It is the company that owns the profits (or losses) and the business can continue to run, regardless of the death, resignation or bankruptcy of the shareholders or people who run it. Tax Limited companies pay corporation tax on their profits and company directors pay tax in exactly the same way as any other people employed to work for the company. Risk Personal financial risk is restricted to how much is invested in the company and any guarantees given when raising the initial finances. However, if a company fails because the duties of a company director have not been carried out correctly, then that person could be liable for debts as well as being disqualified from acting again as a director in another company. For a complete range of services that cover company registration, contact the Business Tax Centre. Find them at www.btc-nw.co.uk. and speak to the best company formation agents around.
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