PUBLIC ENTERRISE

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Benefits are 1) RISK AVOIDANCE by limiting liability - as outlined above and ESPECIALLY EMPLOYMENT LEGISLATION WEIGHTED IN FAVOUR OF EMPLOYEES. Risks that would normally be the responsibility of partners and sole traders become the responsibility of the company. Industrial tribunals are awarding up £50,000 to employees for compensation claims! 2) ANONYMITY - You can appoint nominee company officers and shareholders. No-one need ever know who is running the company! 3) Protection of name (Companies House will not register another name that is the same). Also if another name is registered and it is considered to be 'too like' another existing company the latter can lodge an objection with Companies House who can direct the new company to change its name. You may also want to consider UK Trademark protection of your company name, for further details on this service go to our trademarks page. 4) Many of the problems of partnership are avoided such as defining who is in charge, who owns the business (the shareholders), resignation of partner, etc. 5) More credibility in the market place. 6) Raising capital - easier to raise loans for the business, etc. 7) Tax Free Mileage. For business purposes the car mileage rate is 40p on the first 10,000 miles (£4000 per annum). 8) Reduced tax bills - (For the fiscal year to 31st March 2005 Corporation tax on profits is 0% (zero) on first £10,000. When net profit reaches £50,000 the rate of tax is 20%, i.e. £10,000). If you are a higher rate (40%) taxpayer it can be beneficial to draw a low wage from the company so that the higher 40% rate is avoided, leaving the balance of net profit liable for the 20% rate. This is a common way of preserving valuable cash resources for the business. Some disadvantages could be: Ownership of assets can be locked up in the company. However steps can be taken to mitigate this effect. e.g. directors owning property and leasing to the company. PAYE has to be operated. Details of the company's accounts, officers and shareholders must be recorded at Companies House. Although this removes privacy it does make the company much more transparent which will aid your clients in assessing the identity suitability of dealing with your company.