By Gary Townley Senior communications manager at Companies House.
When you hear the word limited, what do you think? It sometimes brings up negative thoughts. For example, the project has met with limited success, he tried his best but the performance was limited, there was limited room for improvement.
On other occasions, it can mean the exact opposite. A limited edition can mean the product is exclusive, more valuable or have special features. A limited edition print, a collector’s edition of a book and even a limited edition hamburger.
Making something seem rare can make it seem more desirable. Think of when you’re booking a flight or a hotel, you’ll often see that there are limited seats or rooms available.
Sometimes, being limited can be really useful: speed limits, credit limits and the term of office of a US President.
There are aids to help us keep to limits. I have a limiter on my car which is very useful, helping me to avoid those nasty speed cameras, limiting the speed of my car to the road speed. I have a credit card limit to stop me spending on lavish holidays, mid-life crisis motor cycles and electronic devices I can’t operate.
But the most important limited, is the limited that sits behind the name of a business. Having ‘limited liability’ status means the company is an entity in its own right. This has several advantages.
As long as the company name you want to use is available, (you can find out by using our company name checker), you’ll have exclusive rights to that name. But, don’t forget to check the trade mark registry as well.
Assuming no fraud has taken place, ‘limited liability’ means you will not be personally liable for any financial losses made by the business. A limited company can give you added protection, should things go wrong.
Because a limited company is a distinct entity from its owners, it may be a little easier for a company to secure business loans and investment.
A limited company may benefit from tax advantages. You would be advised to seek professional help to make maximum use of the rules and regulations with regard to pensions, dividends and car ownership.
The company will exist beyond the life of its shareholders. If they retire or resign, the company will continue to exist and operate, which ensures security for employees. If the directors are the main shareholders, business decisions can be made quickly and easily, allowing for a successful business strategy.
As with most positives, there will be some negatives. And starting a limited company does have a few.
There are costs: registering a limited company will cost £12 if you apply online. You’ll be required to send us information which will appear on the public register. This information will need to be confirmed or updated on an yearly basis.
The good news is, you can use someone to do all of this for you (an accountant, for example). But, most of these requirements can now be done fairly painlessly. If you’re competent on a computer and can perform administrative tasks, starting a company and dealing with these returns can be completed by following the guidance on starting a company.
So, being limited and having limits have different meanings. But, if you’re a fan of 2 Unlimited you’ll know there actually are ‘No Limits’.