Almost all contractors who provide professional services to clients trade via their own limited companies, or join PAYE umbrella schemes. Here we’ve compiled a table to help compare the pros and cons of each structure.
Business Structures - Limited Company
Most professional contractors work via their own limited companies. It remains the most tax-efficient business structure, despite the April 2016 dividend tax hike.
Company directors have more paperwork and legal obligations than umbrella company contractors, but in reality, a specialist accountant can take care of these administrative duties for you.
- Limited company basics - how to set up a company, and the responsibilities you have as a director.
- Limited vs. Umbrella - find out more about the advantages and disadvantages of each business structure.
- For more in-depth guides to setting up and running a limited company, visit LimitedCompanyHelp.com.
Limited companies – a complete guide for contractors
Many IT contractors work via their own limited companies. There are a number of benefits to incorporating; we look at how the formations process works, and what it means to be a limited company director.
Managed Service Company legislation – how does it affect contractors?
A recent case has highlighted the impact of the MSC legislation on the contracting industry. How can you ensure that you are not involved with an MSC provider – who is effectively controlling your limited company?
Why it is hard to secure contract work as a sole trader
Why recruitment agencies and end-clients are unlikely to hire contractors who do not work via either a limited or umbrella company structure.
What is a Certificate of Incorporation?
When you register a company in the UK, once your application has been processed and approved, Companies House will send you a formal certificate of incorporation.
10 things you should know before setting up a limited company
If you have decided to trade via your own limited company, you have to submit an application to Companies House, the registrar of companies. Here, we’ve listed 10 bits of information you need to collect in advance to ensure your formation can be processed correctly the first time.
How much does it cost to set up a limited company?
There are several ways to set up your own limited company; via an accountant (a popular way), via a company formations agent, or direct with Companies House. Here we look at the typical costs associated with each option.
Limited or Umbrella Company – which is best?
Which type of business structure should you use? A basic overview of how limited and umbrella companies work, and some of the pros and cons of using each stucture.
In what sense is your liability limited if you run a company?
One of the main attractions of contracting via your own company is that the liability of its shareholders is limited. So, to what extent is the liability of company directors limited?
Why your limited company might need a shareholders’ agreement
If you decide to set up a limited company with other people – either for contracting purposes or to run another type of business, how do you ensure that all of your shareholders (including yourselves) are protected in case something goes wrong? A well-drafted shareholders’ agreement might be the answer.
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