Another attractive feature is that there is limited liability. This means that the shareholders' liability is limited to the value of the shares held by them should things go wrong. The personal assets of the directors cannot be seized to pay off debts.

Only property owned by the company can be touched (except in the case of fraud when the directors may be found personally liable for losses if they knowingly incurred debts they knew or should have known the company could not or was unlikely to repay).

Registration of a limited company will protect the company name selected. This is because the name has to first be approved first by Companies House which o maintain a register of company names to ensure that the name chosen is not already in use.

There are also tax benefits. Directors are required to pay income tax, but the company pays corporation tax on company profits, which is one rate of tax only and averages out at much less than if income tax were paid on the profits. In the case of sole traders and partnerships they would have to pay income tax on profits.

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