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Entrepreneurs need to consider the pros and cons of how they structure their venture

Sitting down and choosing the right business structure for your start-up may not be the most exciting of tasks, but it can not only help you get off the ground and start turning a profit, it can also save you a lot of hassle in the future.

As growing numbers of traders choose to go it alone and set up a business of their own rather than working for someone else, graphic designers across the UK, as well as real estate agents and recruitment consultants are booming as entrepreneurs make a real effort to choose the right logo, premises and staff for their new venture.

However, according to some experts, relatively few start-ups pay the same amount of attention to the actual structure of their business, despite the fact that this can have significant implications for the future, not least when it comes to tax issues.

One entrepreneur who has experience of going it alone and who knows the importance of choosing the right corporate structure is Henry Catchpole, CEO of Inform Direct.

According to Catchpole, the structure is so important that it can "often spell the difference between success and failure in today's competitive marketplace".

Indeed, writing for the website, the businessman explains that limited companies in particular offer a number of distinct advantages.

Above all, setting up a start-up as a limited company means that it has its own legal identity. As such, clients and other third parties trade with the company and not you or your shareholders, making filing taxes much easier for starters.

This also means that the governance of a company is more flexible. In the event of the owner's death, the company continues, plus shareholders, board members and even CEOs can come and go with the firm retaining its legal integrity.

Indeed, a company will only cease to exist if it is either formally wound up or liquidated by order of a court of law, making it easier to make sure that your company stays within the family or is passed on to a designated successor if you have to give up for whatever reason.

One other major advantage of choosing to register as a limited company rather than a sole-trader is the impact this can have on your tax affairs.

Quite simply, while sole traders pay income tax, and even partnerships pay partner tax, limited companies pay corporation tax, which are, of course, lower.

This alone makes all the hassle of the initial paperwork more than worth it.

Moreover, being a limited firm, you are in a position to reward employees and investors with shares or pension contributions, boosting morale and ensuring you benefit from a loyal, motivated and productive workforce.

Finally, there's the 'soft power' that comes with being a limited company rather than a sole trader.

Just seeing the three letters 'Ltd' after a business name will instil a sense of confidence in many prospective clients and many other companies will go so far as to avoid any operator that lacks this suffix altogether.

Registering as a limited company, then, may well require a lot of paperwork to begin with. However, since it could not only boost confidence in your brand and potentially drive new business, plus then make any new business even more tax-efficient and so lucrative, in most cases, the extra red tape is more than worth the hassle.