Limited Liability What Does This Mean?

A: If you operate as a sole trader your personal assets may be at risk in the event of a liquidation/legal action from a creditor or third party.

However if  as you say you set up as a limited company you and your business are separate entities before the law and therefore your personal assets are not at risk. If your limited company is wound up/liquidated you will have no personal liabilities.

Another benefit of operating as a limited company is that it often gives suppliers and customers a greater sense of confidence in your business. Larger organisations will prefer not to deal with non-limited businesses.

Liability is not the only factor you should consider in how you trade. If you would like to discuss how you intend to set-up in business please do not hesitate to get in contact with us.

Date published 1 May 2015

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.