Limited company or partnership?

[mariner2]

Our accountant is advising us to go limited, but other people are advising against this, anybody know what the pros and cons are?

[shafiQue]

What type of business will it be? Though the answer depends on many factors, going Limited seems to be a more popular choice thesedays simply because a Limited Co is a seperate entity, therefore you will become an "employee/ shareholder" of that Company.
You are not personally liable and creditors etc cannot look to you personally for these liabilities. Also, if done correctly, you can end up paying less tax e.g salaries can be split to "wages" and "renumerations", being more tax efficient.
It would depend on the business/ nature.

[mariner2]

We are a high street photography studio (man and wife partnership) doing weddings and family portraits.
As you've pointed out, our accountant actually showed us some figures yesterday that indicated if we had gone limited last year we would have been �3000 better off, even taking off his �500 still puts us �2500 ahead, but my other half thinks there is a catch somewhere?

[Postdog]

There's no catch. If I were you I'd go with the advice.

[Oneeyedvic]

Just a suggestion:

If you pay a professional (like an accountant, solicitor etc) for their advice, I would either trust them and follow their advice or if for some reason you don't trust them, I would change!

One of my clients is about to go limited (just after April) again to save paying tax.

As a limited company, you can take dividends out which you pay a lower rate of tax on.

[ncjames7048]

Be careful! Dont listen to the bit about "If you are a Limited Compan you are protected if it all goes wrong" this is smply not the case anymore since the Enterprise act, which made the Tax and Vat man no longer prefferential creditors. Dont forget. that as company directors, if it goes tits up, the official receiver and the DTI can still decide you were party to "Wrongful trading" for allowing the Ltd. Co to continue to run when it was in touble, and they can then do you for that as well! Be mega careful ok. But in general, I advisenearly all my clients to go Limited as it is much more tax efficient but then of course there are more compliance issues such as filing account 10 months after year end, filing anual returns etc, but I still personally think in the ajority of cases it is the best place to be! Hope that helps!
oh, also - ask you accountant about selling the goodwill on. It sounds as if you are already trading sole trader so there is sometimes goodwill that can be sold into the Limited company by the Sole Trader - your accountant WILL now about this and what I mean - ask the Question!