This is a difficult time for businesses of all sizes, but as usual, it is the small ones that bear the greatest burden of the financial downturn. When money is tight clients and customers are more inclined to search for the cheapest possible option (even if it is of slightly lower quality), and with big business better able to keep overheads low and prices down, they are more likely to get the custom.
Small companies can survive- indeed, there are plenty doing well even in this harsh economic climate- but the risks are greater. All it takes is one large debtor to go under, and any business can get into trouble. That’s why it’s important for small company owners to consider limited company formation, now more than ever.
The process of company formation can offer a degree of protection in case the worst should happen. If a sole trader has to declare bankruptcy they stand to lose personal assets and savings. The director of a limited company does face serious consequences if bankruptcy occurs, but their personal assets are protected under most circumstances.
Limited company formation is not difficult, expensive, or a protracted process. There are different tax and revenue reporting requirements for those moving from sole trader or partnership status to a new limited company, but these are not too demanding for most small businesses. Some potential partners and clients will form a more positive opinion of a limited company, too- there is more than one reason to go through the formation process.
A company formation agent can take care of most of the paperwork. They can even submit all the necessary information to Companies House, which holds the details of registered companies. A small business owner can go through all the required steps online, and in most cases registration goes smoothly and swiftly.
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