Do I need a Limited Company?

If you wish to trade and do not use a limited company you will be personally liable for the debt of your business. If you have assets or savings they are vulnerable to a claim made against you.

By trading through a limited company you are literally placing a limit on your liability. That limit is the value of the company, including any money you may have invested in, loaned to or are owing to the company.

The company has a separate legal identity from its owners and directors and unless they sign a personal guarantee for its debts they are not liable for these.

Some people register a limited company because it confers tax advantages on them and others will do so because they want to give a share in their business to a third party an this is usually the most convenient way to do so.

There are no hard and fast rules about when it is best to register a limited company and usually the decision is based on a number of factors. If you are unsure please take professional advice.