Many small business owners run their businesses through a Limited Company for the simple reason that if it all goes wrong they won’t lose their house to pay off the debts of the business. For bigger businesses this is imperative, but there are also worthwhile tax incentives for smaller businesses to operate through a Limited Company.
However a Limited Company comes with a good deal of administrative burdens. The Companies Act 2006 requires accounts, returns and various other forms to be filed with Companies House to strict deadlines with fines (or even prosecution!) for those who don’t comply.
HMRC require Accounts and Corporation Tax Returns to be completed every year and these must be submitted to HMRC in a prescribed electronic format known as iXBRL.
An alternative structure is the Limited Liability Partnership (LLP) which shares the limited liability status of companies, but is taxed as a regular partnership.
Useful Link: Companies House