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REASONS FOR A
FORMATION OF AN UNLIMITED LIABILITY COMPANY BY
SOLE-TRADERS
Sole-Traders
do not have a
limit on their liabilities.
For Sole-Trader, who make every decision on
their own, can pass all his/her belongings to
the next of the kin just by a will - this type of
formation (bare in mind that a member of the
family (or nominee) can take a position of the
company secretary, can give to his/her business,
some of the great opportunities, including:
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Pay less tax than an employee for a given level of
income. |
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Taxed from start of only 10% and 20% for small
companies. |
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Capital can be accumulated within low tax environment. |
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An extremely tax efficient way of saving. |
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No National Insurance payable on dividends. |
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Special benefits: cars, medical insurance, mobile phones
up to second home or yacht . |
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PAYE (Income Tax), and Employers and Employees’
National Insurance will typically be deducted when
your accountant processes your payroll. |
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You may also reclaim any expenses you may have
incurred from the company at regular intervals (e.g.
stamps, training, PC equipment, etc.). Those caught
by IR35 are allowed to claim a five percent
'expenses allowance'. |
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If you work through a limited company and aren’t
affected by IR35 rules, the bulk of your income will
be in the form of dividends which you will withdraw
from your company account. |
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At the end of your company’s financial year
(typically 12 months after incorporation), your
accountant will arrange your company accounts. You
will then be liable to pay corporation tax on all
company profits for the previous 12 months (i.e.
turnover minus expenses, salary, executive pension,
etc.). This is payable nine months after your
year-end. |
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Prestige. |
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Possibility
for transferring of the company to any
person by issuing shares or giving the
director power. |
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REASONS FOR FORMATION OF AN UNLIMITED LIABILITY COMPANY BY
PARTNERSHIPS
It is not easy to
operate when you have only two types of
partners: partner and 'sleeping partner'.
Basically, any partnership is an unlimited
liability company which operates with just one
difference - their financial situation and other
circumstances are not available for the public
as they are not obligated by law. On other hand, the partners can not account this list of
possibilities, which include:
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To sell their part of
business without any obligations to the
other partners (by enforcing it through
shares agreement). |
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Can not have an
independent directorate which control
the finance. |
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Can not give their
share in the business to their family
without partners acceptance.
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And many other reasons
for which we can explain you on the basis of
your personal circumstances.
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