griffen started this topic @ 21:06 on 09/11/2005
Hi everybody,
My first post. I'm in the process of forming a consultancy company devising E-Business solutions for clients. My co-founders are pushing for a Limited Liability Partnership due to the cost aspect of Ltd company. I am more pro the Ltd company due to the protection that it would offer myself and my colleagues. Does anyone have any experience with either of the business types and can you offer me some advice regarding this I'm a little lost.
Thanks.
RE: Limited Liability Partnership or Ltd Company
James Smith | 10/11/2005 09:45 AM
The extra costs of a limited company are very real, but not an awful lot more than a set of partnership accounts (a few hundred pounds extra in accounting fees).
It’s really a question of how big a business you are, and are planning to be. Ie if you and your partners are all going to work on this full time, then a ltd co. will probably be a "no brainer" from a tax perspective. If this is just a side project than a normal partnership or an LLP will probably be appropriate so you don’t have the overhead to the company accounts and other administration to consider, although you do still need to have your partnership accounts prepared. You can always incorporation as a stage 2 if the project is successful.
You should also note that your general professional indemnity insurances should cover you for claims for a consultancy business, and limited liability probably won’t have any practical effect. It isn’t the sort of business that will have trading risk, as you would with a retail shop where you have a lot of money tied up in stock etc.
I don’t mind having a chat on the ‘phone to people who are just starting up to go over this in more detail as it it very much dependant on your circumstances as to what is the best option.
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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