Don't fancy risking your personal assets? You need
a Limited Liability Company...
If you are new to contracting and are considering a limited
liability company, we have included below the basic positives and
negatives to help you with your decision.
There are many advantages to setting up your own limited
liability company and the main one is the fact that your personal
finances remain completely separated from your business finances so
you will never be personally liable for any of the limited
company's debts (unless you sign a personal guarantee). Also,
limited liability companies are able to determine the level of
salary and dividends you wish to take allowing you to have some
control over how much tax you pay. With a limited liability
company, you generally have more financial control over your
business than with say sole traders or certainly umbrella
companies. There is one major issue to bear in mind however
with a limited liability company and that is IR35. It
is strongly recommended that you seek professional advice when
starting out as this could be detrimental to your business.
IR35 is a piece of legislation that affects small, usually one man
band limited companies and has been enough to force companies to
close in the past so professional advice really is a must.
Another negative would be the amount of administration and
paperwork involved compared with the other routes available but
this alone shouldn't put you off.
If you are considering a limited liability company, you will
also need to consider your business finances and obtaining a good
accountant who knows and understands the industry you work in is
highly recommended. It really isn't worth trying to avoid
paying an accountant as their knowledge and experience, especially
when starting out, is invaluable. If you are taking your
business seriously, you need an accountant.
If you would like some further information or advice about
limited liability companies or wish to enquire about our
accountancy packages and find out how we can assist you, please do
not hesitate to contact us on 0117 904 7755 or at info@nasaconsulting.com,
we are always happy to help.