Limited Companies
In a limited company the liability of the people involved is limited to whatever they have invested or guaranteed in the company. Limited companies can be limited by shares or by guarantee, and a company limited by shares can be further sub-divided into public companies and private companies. Anyone can buy shares in a public limited company, but becoming a member of a private limited company is restricted by law and by the company's own rules. To operate a business as a limited company, it has to be registered with Companies House. A process called Incorporation forms a new or existing business as a company, and this can be carried out by yourself, a company formation agent, a solicitor, an accountant or a chartered secretary. A fee is normally incurred.
Tax and National Insurance
Limited companies must pay corporation tax on their income and profits, and they also need to operate a PAYE system to collect and pay income tax and NI contributions from their employees, including company directors.
Liability
As the company is a separate legal entity, this can protect your personal assets from business creditors if the company runs into trouble, cannot clear any accured debts and ceases trading. This structure is useful if there are significant risks associated with your type of business.