Do you know that there are more than 3.5 million limited companies in United Kingdom? There are many great benefits of forming a limited company, which are as follows:

Quick and Easy

The first benefit is setting up a limited company is easy and can be done online. There are great company formation agents that can help you. One of the best company formation services are offered by You do not need to wait for weeks for the incorporation of your new business. They will do all the paperwork and will incorporate your new business in a few hours.

Moreover, the Companies Act 2006 has made easy to run a limited company. The government is interested in making ease of doing business in the UK. Business incorporation in various countries, i.e Singappore has been made easy with Pilato Asia now. You can check these services by clicking here.

Separate Legal Identity

A limited company has its own legal identity which means it is possible to change the directors and shareholders over time. Moreover, in the case of the company’s owner the company can survive. The only way to close down a company is when it is formally dissolved. It provides security for the employees of the company.

Limited Liability of Owners

Another great benefit is that the owner is not liable for the loans against the company. The shareholder of the company is only liable for the unpaid amount of any part or nil paid shares. In the case of sole traders and partnerships, personal property such as your residence is at risk against the debt of the business. It means that a limited company has calculated business risk and there is no risk of losing everything.

Potential Prestige and Credibility

If you are going for the formation of a private limited company then it will be committed to responsible and effective management and has permanence. Moreover, the business will provide confidence to suppliers, customers, and many other companies. Most of the companies only like to deal with a limited company. It will open new opportunities for your new business.

Tax Benefits

There are lots of tax benefits for the limited company. Partners and sole traders need to pay income tax while limited company pays corporation tax. Income tax rates are relatively higher than the corporation tax rates which is a great advantage. Moreover, the company can also pay dividends to shareholders just like salary payments for employees.

Pension Possibilists

The company can make tax-deductible pension contributions to the employee of the company. The company will get a relief on corporation tax against this contribution. Moreover, the pension is not taxable for the employee which is a very big advantage for your employees.


It is possible to leave the business as you can sell it in the future. A limited company has its own legal identity which allows you to sell it. In other business structures, it is not possible.

Personal Preference

Which type of incorporation you want for your new business comes down to your personal preference. Many other business structures like a sole trader are not appropriate in some cases.

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