Legal status

What are the advantages of operating as a limited company?

There are a number of advantages in forming a limited company. These include:

• The liability of the owners of the business is limited to the initial cost of their shares.
• Finance can be raised by selling shares in the business.
• Employees are able to own a share in the business.
• As a limited company has a separate legal identity to that of its owners, the company can continue trading despite the death or resignation of a member.
• Suppliers and customers may perceive that limited companies have more credibility, which could be a competitive advantage.