Disadvantages of Limited Company

Topics: Corporation, Legal entities, Limited company Pages: 2 (350 words) Published: January 28, 2013
Disadvantages of a Limited Company

Cost – Some people will have you believe that a Limited Company is expensive to set-up. Not so! Our Company Formation packages start from as little as FREE! And include many related services and products that would cost you highly elsewhere.

Complex Accounts – There are more complex and restrictive rules governing the accounts and bookkeeping of Limited Companies than sole traders (for example). The Company is expected to produce years accounts incorporating a double entry format, balance sheets and other notes. With the (generally) larger nature of a Limited Companies business this can be a time consuming and costly undertaking. The Company Warehouses accountancy service is custom made to ease the burden on Limited Companies. Our low-cost, competitively priced service will take hold of the accounting reigns and allow you to remain free to concentrate on the running of the business.

Restricted Capital Raising – For Private Limited Companies, there is a restriction on the raising of capital via sale of shares. As mentioned, PLCs can gain further funding by the sale of shares, but this ability is lost to Private Limited Companies whose shares are restricted.

Dilution of Powers – Due to the nature of Public Limited Companies, sometimes disputes will arise between Directors and Shareholders as their ideas of what is best for the company vary. Sale of shares to increase company funds will further dilute the management, as more and more people have a say in how the company is run. There is also a risk (since Companies can buy shares) that a takeover might occur this way.

As you can easily see, the advantages of a Limited Company, far outweigh the disadvantages. So if you are looking to set-up a company, why not let www.TheCompanyWarehouse.co.uk help you? Our expert team have been helping entrepreneurs from all over the Country form successful businesses for years. Our Company Formation Services are the lowest...
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