Incorporating Your Small Business as a Limited Company

Not sure whether to run your small business as a limited company or stay a sole trader? If you’re a small business then registering as a limited company could help you to make significant tax savings, up to £3,500 a year.

Incorporation AdviceThere are lots of additional advantages to having an incorporated small business, including liability protection for company directors, and the option to raise capital by selling company shares.

wedo accountants are specially-trained to advise you on whether incorporation is the right way to go, by considering all of the relevant factors for your small business, and then providing long-term financial forecasting services to predict what will happen if you become a limited company or stay a sole trader.

Fancy a free, 1-hour initial consultation? We offer complementary face-to-face meetings if you’re based in London, or a free 1-hour call with an accountant if your office isn’t based nearby. CALL WEDO ACCOUNTING: 0208 936 7605

What is Small Business Incorporation, and Should You Make the Move to a Limited Company?

Incorporation is the act of registering your small business as a limited company, rather than remaining a sole proprietor or partnership. This is one option available to you if you run a UK-based small business, and it can often make sense, both financially and legally, depending on your situation.

If your business makes a profit after you take out your salary, you could benefit from switching to a Limited Company Structure (LCS). That’s because profits are taxed at the corporation tax rate of 12.5 percent, which is significantly lower than the personal tax rate, which could be as much as 55 percent depending on your income.

The Benefits of Business Incorporation

Tax savings: Most businesses that register as limited companies or corporations receive tax deductions that help to improve their efficiencies. We estimate that our small-medium business clients save on average up to £3,500 when they register as a limited company through us.

 Company share sales: One of the biggest benefits of registering as Incorporated, is that you can start selling company shares and generating additional revenue via shareholders. This is often a great way to boost small business growth.

 Liability protection for company directors: Except in very particular cases, the directors of a limited company are not liable for that company’s debts, whereas sole traders are. You might have to make personal guarantees when accepting a business loan as a company director, but you’ll be much more insulated.

Is it Difficult to Register My Small Business as a Limited Company?

It can be, if you attempt to do everything yourself. That’s because there are quite a few options to choose from; including Limited Company Formation, Limited Liability Partnerships and a whole host of other setups that may sound very similar, but which actually have quite different legal and financial implications for your business. Not to mention a ton of financials to provide, I’s to dot and T’s to cross.

That’s why wedo accounting takes care of everything to do with business incorporation registration and ongoing administration for you. We keep you compliant, tax efficient and optimise your efficiencies.


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