What are the benefits of a limited company?

The key benefits of a limited liability company are;

• A limited company is a separate legal entity and thus distinct from its shareholders and directors, which means that both the directors and the company have completely separate rights and existence's.

• The liability of the shareholder of a limited company is limited to the amount unpaid on any shares issued to them.

• A shareholder cannot be held personally liable for the debts of a limited company.

• Creditors of a limited company can look to the company for payment, which can only be settled out of the company's assets; thus, generally, the personal assets of the shareholders and directors are protected.

• Once your proposed company name is registered as a limited company, the name is protected by law and no one else is allowed to use it in that jurisdiction. This does not usually apply to a business name, as this confers no exclusive or proprietary rights and offers no protection against duplication.

• Operating as a limited company often gives suppliers and customers a sense of confidence in a business. Quite often, larger organisations in particular will prefer not to deal with non-limited businesses.

See also benefits of a PLC Public Limited Company

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