Why to setup a limited company

In the Uk the formation of a limited company turns a company in to a corporation, which is a separate legal entity distinct from shareholders. So a limited company is separate from the personal assets of the shareholders or owners of the company, where as the partners and sole traders are liable for all business debts.

How to form a limited company?

You can form a limited company easily with all these following steps:

• Check the availability of your company name
• Download form 10 and form 12 from the website of company house
• After down loading the forms, take a print out and put the signature of directors and company secretary
• Memorandum of association should include the company name, type of business and location of the company
• Articles of association contain power of directors and rights of share holders
• Prepare the memorandum and articles to submit in your state LLC office
• With a Cheque of £20 Post Form 10, Form 12, memorandum and articles to companies house.


The private company formation agents or professionals prepare the above documents.

Why to form a limited company?
A limited liability company is a legal separate entity where liabilities of the owners are limited. A limited liability company is often regarded as LLC. In United Kingdom it is referred as limited or ltd. The businesses choose to become LLC because of limitation of liabilities because the owners bear the much less responsibilities for debt issues that the business may undergo in near future. A private company may be limited by shares or guarantee. Few of the benefits are mentioned as follows

• It provides risk avoidance or personal liability protection for members
• No need to maintain the meet the business formalities to maintain the business status
• You can appoint Nominee Company officers and shareholders.
• Raising loans can be much easier for business
• More credibility in the market
• Pass through taxation is the most vital benefit of Limited Liability Company