A private limited company is a business structure in which the company is counted as a separate entity from its owners and investors. In this business structure, the corporation is liable to pay taxes on its revenues and profits, and the liability of the owners is only confined to their invested amounts of capital in the company. And also, owners are not personally liable for the debits and or any other liabilities.
In the case of insolvency, banks, trade creditors, and any other payables can not recover their debts from investors or owners’ personal assets without any signed personal guarantees. It means that in this business structure, the personal assets of shareholders and safe. This business structure is an amalgamation of sole proprietorship, corporation, and partnership features. For the people who are concerned regarding the safety of their personal assets, this business structure is typically the right choice to invest their capital.
One of the key benefits of incorporating a limited liability company is limited liability status, but it is not the only matter of attention before investment. Many other factors, including profit shares and governance structure, are also considered exclusively.
Profit shares and Capital Investments
In limited companies, shareholders invest their capital through the issuance of shares, and after investing, they have the right to withdraw their amounts in the shape of loans or dividends from the company any time they want. The sum of dividends majorly depends on the availability of the corporation’s net profit after paying taxes. HMRC also makes a cut of 25% tax over the overdrawn director’s account balance at the year-end that is repayable in the case of the reduced bank account balance of directors or by paying back to the company.
As private limited companies can not offer their shares in the open market and often has very limited access to capital investments, these kinds of companies are usually family-owned or the partnership of close friends. On the other hand, public limited companies have access to the open market to offer their shares for gaining capital investments.
In limited private corporations, directors play a key role in the decision making at the corporate level, but to pursue any business plan or strategy, shareholders have the right to vote in the annual general meetings. These businesses always run under the corporate business structure governance rules, and the way of designing a company’s management structure majorly depends on them. There might be some committees that play a significant role in the management and decision making for the company.
Taxation and Reporting Responsibilities
In contrast to sole proprietorships and partnerships, limited liability companies pay corporate taxes at their own gains and profits. While in other business structures, owners are liable to pay their taxes on profits in their income taxes. Also, every registered business in the UK premises is required to be registered for VAT and pay accordingly in the case of meeting the set threshold of £85,000 by HMRC.
All the registered private limited businesses are required to manage their entire records, preparing their annual accounts reports and confirmation statements, and submitting them within the specified deadlines to the Companies House. In the confirmation statements, a company is bound to provide complete information on any recent change in the administration of infrastructure and other related aspects that will be publically available on the Companies House website.
Why is ProAccountax The Right Option for PLCs?
Accounting and taxation professionals working with ProAccountax have extensive experience of dealing with companies of multiple portfolios, so they can handle your accounting and taxation matters in accordance with the requirement of industry-specific regulations. We are unbeatable in preparing your annual accounts, tax returns, annual returns, and VAT returns in reference to the regulations and criteria set by the HMRC and their timely submission to the respective authorities to avoid our client businesses from bearing penalties or any kind of legal implications.
Our Key Services for Private Limited Companies
ProAccountax offers a wide range of services in relevance to the administration and operations of a business. Being a PLC, you can take advantage of our following services for your business to be relaxed about your taxation and accounting matters.
- Industry-specific accountants and business-oriented year-end report packages
- On-time preparation and submission of the confirmation statements and annual accounts
- Account management within the desired intervals
- Monthly accounting and Xero support services
- Preparation and submission of all tax returns to HMRC
- Payroll management and PAYE registration
- Consultation for dividends and minimum wages
- Timely alerts for tax returns and other deadlines
What Do We Charge?
We offer a compact package of accounting and taxation services for limited companies at very reasonable rates. Our services start from £50 and depend on the size of your businesses.