The idea of starting a business is not just enough for the plan to happen but it takes a great deal of planning. The pre-requisite of starting a business is its type. Whether it is going to be sole trading or a limited company, it is important to know everything about both types of businesses. Like every other type of business, here are 5 advantages of running a limited company.

Financial Security

One of the most important positive aspect about owning a limited company is the financial security it offers. In a limited company setup, if the organization faces any loss or falls into debts, the stakeholders are only liable to pay that share of debt which is in accordance to their investment percentage and nothing extra. This puts the investors at ease for any losses that may befall at the firm.

Company as a Distinct Entity

Another advantage that owning a limited company features is its existence which is independent of its owner. This guarantees the functioning of the company even after its members. In this way, the death or retirement of any member would not affect the working of the organization.

Taxation

For a limited company owner, the taxes are only applicable on the profits and in this way the taxation is less than that of a sole trader. Therefore, owning a limited company facilitates taking home a greater share of the earnings

Hassle-Free Ownership

For a limited company, the directors themselves function as the shareholders. In this way the ownership and control of the setup remains in few specific hands which in turn facilitates easy and quick decisions without creating a lot of fuss; something which may happen if the same responsibilities falls in more hands.

Protection of The Identity

For a limited company, another advantage is protection it offers. Once registered, the name of the company can not be used by anyone else unlike a sole trader who do not possess such liberty.

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