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BENEFITS OF A LIMITED COMPANY BENEFITS OF A PARTNERSHIP
from Luxury BnB Magazine April 2023
by Luxury BnB Magazine - PRINT | ONLINE luxury B&B’s and Guest Houses across the UK
Credible Structure
• A limited company is a very credible structure.
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• If you’re looking to create a professional impression, it’s a simple way to establish trust.
Investment Management
• It’s easier to manage investment in your business via a limited company.
• In fact, some investors may not be willing to put cash into the enterprise, unless it is structured in this way.
Tax Efficiency
• A limited company may be more tax efficient.
• Shareholders are only taxed on what they withdraw from the company, as opposed to their share of its profits.
No Filing Requirements
• There are no filing requirements for a traditional partnership and no need to register at Companies House.
Clear Business Structure
• You can draw up a partnership agreement that makes the business structure clear and identifies the roles and responsibilities that each partner has.
Tax Efficiency
• Partnerships may be more tax efficient.
• It depends on individual circumstances but there can be tax benefits to a partnership.
Partnership Liability
• If you set up a partnership all the partners will have joint and several liability.
• This means each one is liable for the entire debt of the business if something goes wrong.
Other Things To Consider Convenience
• For some, the partnership vs limited company decision may come down to convenience.
• A limited company is a more complex structure than a straightforward partnership.
FILING REQUIREMENTS
• There are filing requirements and limited companies must publish annual accounts.
SEPERATE LEGAL ENTITIES
• The key difference between a partnership and limited company is often identified as the fact that a company is a separate legal entity.
What Is A Partnership
• In a partnership the partners own the business and are responsible for any liabilities it has.
Summary Of Chapter 2a
This brings Chapter 2A to a close, and we hope that we have made the process of writing up the business plan and understanding the legal entities involved a little bit easier for you.
The next Chapter (2B) will explain the key parts of finance, which include the different types of borrowing available and how to get the right support. It will also introduce you to release from the pension pot and self-investment.