Forming a Limited Company

Setting Up a Limited Company Gorilla Accountancy Services

Limited Company or Sole Trader?

If you’ve just started your own small business, this is a question you will have probably already wrestled with. Or maybe you’ve been operating as a sole trader for some time and are now considering incorporating and starting a limited company.

If you are, you’re not alone! There’s currently over 4.5 million private limited companies registered in the UK, and a further 500,000 are incorporated annually. At Gorilla Accounting, the vast majority of our clients choose to operate as limited companies.

When you operate as a sole trader, you’re registered as self-employed. Things are simple; you work, submit your self-assessment and pay your taxes. An advantage of sole trader ownership is that there’s less bureaucracy which helps the self-employed achieve a good work/life balance.

But if you incorporate you can still achieve a great work life balance and enjoy the many benefits of operating as a limited company, especially so with Gorilla Accounting in your corner!

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Advantages of Limited Company Ownership

Put simply, there are many benefits of a limited company setup over being a sole trader.

Increased Tax-Efficiency

Typically, operating through your own limited company will see your take home pay increase. You get increased flexibility in terms of how you pay yourself through a combination of salary and dividends. Dividends are paid out of company profit after corporation tax and are taxed at lower rates than income tax rates. Significant tax savings can therefore be made.

Gorilla Accounting are experts in tax planning and we ensure that your remuneration is structured in the most tax-efficient manner which ultimately increases your take home. Use our calculator to get a quick guesstimate of your expected take home pay.

Claim On Expenses

As an incorporated business, you have the ability to claim a wide range of expenses which can be used for corporation tax, resulting in more take home pay for you. Operating as a limited company enables you to claim more expenses than if you operated as a non-limited company. For information on what expenses you can claim, visit our Guide to Expenses page.

Protection Of Your Personal Assets

Limited liability means your personal assets, such as your home, car and investments, should be protected in the event your company runs into financial difficulties or becomes insolvent.

As a shareholder, you aren’t personally liable for the debt of the company due to it being treated as a completely separate legal entity from directors and owners. This significantly reduces financial risk and gives greater peace of mind. There’s an increased level of risk for sole traders, however, as they are personally liable for any debts and losses incurred. This means that personal assets could be at risk from creditors if your business was to go bankrupt.

Better Credibility & Status

Once you incorporate, the perception of your business with clients and investors will be more favourable than if you operated as a sole trader. There are various reasons for this, including tighter regulation and monitoring of limited companies and increased transparency due to accounts and corporate details being available on public record.

Limited companies are held in higher regard and in many sectors business will only work with limited companies. The increased credibility that comes from incorporating will make it easier to attract new clients and also win new investment. Over time you can build a strong brand identity and compete on a level playing field with other limited competitors in your sector.

You’ve decided to become your own boss and work through a private limited company, but where do you start?

We understand that forming a limited company can be daunting and may be a new experience for you. As accounting experts, Gorilla’s Team of Company Formation Accountants can assist you with forming your limited company from start to finish. We make incorporation easy.

The Gorilla Accounting team have helped thousands of customers set up their limited companies and can assist you every step of the way. We could even have your company formed the very same day!

Before you start our company formation process, you will need to pick your company name. You can check if the name is available on the website here. Alternatively, give a member of our New Business team a call on 0330 107 9674. You can choose any name you like, provided it is unique and meets Government guidelines.

From there, you will require a business account. This is a legal requirement due to the limited company being a separate entity from you. Funds held in the business account will belong to the business, and only become yours once they have been paid into your personal account.

We have partnered with Mettle, the free business account from NatWest. Click here for more information.

If you decide to set up a business account with your personal bankers instead, the Gorilla Accounting team will happily assist in providing any information required. Newly formed companies may need to register for VAT.

Gorilla Accounting offer an expert full Company Formation service including Share Certificates, Statutory Books, VAT Registration and a Business Bank Account, all for just £100 + VAT.

Our limited company incorporation service includes:

  • Registration of your company with Companies House
  • Certificate of incorporation
  • Share certificates
  • Business bank account application
  • VAT registration
  • Memorandum and articles of association
  • VAT flat rate scheme registration

If you have any queries, click request a call back to speak to a member of our team for expert help and advice or call us on 0330 107 9674.

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