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Limited Company What’s Hot

Limited Company What’s Hot and What’s not!

Ferrum London managing director Jacqueline McGregor talks you through all you need to know about your company status.

The thought of becoming a limited company can leave new entrepreneurs quaking with fear and confusion, but it need not. So how do you make that decision when you’re first starting out? Let’s look at the upsides and downsides…

What’s Hot

  • Potential for more take home pay
  • Greater borrowing power to expand your business
  • A company status that can attract bigger business
  • The ability to work with more agencies (many won’t work with sole traders)
  • The same kind of flexibility you had as a sole trader (you’re the boss after all)
  • You’ll also get limited liability- legal protection that separates your own finances from that of your company in case things go unexpectedly fruit shaped (not that they will- we’ve got faith in you)

What’s not

  • Higher Costs limited company as the accounts have to be in a prescribed format
  • Dividends do not go towards pensions. Although dividends can be paid and do not attract NI, they do not rank as relevant earnings for pension contributions
  • There are much stricter regulations concerning employee and director benefits,especially in respect of cars.

So it really does pay to be a limited company.

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