If you are establishing a business you may well be wondering what the appropriate form for your business is. You may choose to become a sole trader or a partnership. However it is worth considering the Benefits of Trading as a Limited Company.

One of the biggest advantages is that the status of the business is different from that of its members. That means the people are responsible are not directly tied to it. There is one very significant reason why this is important.

For most businesses the need for access to credit is key and can make the difference between a business growing or becoming stagnant and losing out to quicker developing businesses. It is also usually easier to lend to a business in this form as opposed to other forms. Lenders will usually charge against the assets of the business or what is known as a fixed charge for the whole business.

By contrast the members of this type of business are only responsible for unpaid shares. While the assets of the business itself can be claimed the members are not responsible for the debt. This means that members cannot lose their property or other assets.

It is famously said that there are two certainties in life, death and taxes. For a business this is a key issue. A sole trader or a partnership will pay income tax while a limited company only pays corporation tax on its taxable profits. This means there are more allowances and costs and so with the right advice it is possible to avoid a lot of taxes and save money.

It is worth discussing the Benefits of Trading as a Limited Company with an independent financial adviser. They should be able to see what is appropriate in your financial situation. Look online to see what organisations in your local area offer appropriate financial advice.

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