If there is one thing that many of us would want to know, especially those who are related to business, that would be about the reason why limited company formation is much better that partnership company formation or even sole trader. We will be answering this question as we go along our topic of discussion here in this article therefore, if you are interested to know more about it, better read it till the end.
When it comes to limited company formation, if there is one thing that you have to know of, that would be how the key benefits they have lie on the people who take charge in all of the company activities. These days, you should know that is something goes wrong or if you have committed a mistake, you will not be held liable for it. On the other hand, if it is a case of fraud in which your company decides to do any business transactions that are considered illegal by the law or do business outside the scope of registered business, both the directors and the shareholders will be help liable personally by the court through count order. When it comes to partnership type of companies or even sole trader, the thing is that if something goes wrong with it, the parties that are involved with it will be personally help accountable for the mistake committed, excusing no one.
In the event that the directors were to retire, to be sacked, to resign or pass away, the company will still continue to function and exist and business will still remain as is.
There are other good things that come from limited company formation such as its accessibility to acquiring government projects through tenders, since almost all projects of the government and even some large scale projects only opened to limited companies to tender since they are requiring credibility and financial stability as well. That is not it at all as there goes the fact as well that limited company formation has a much higher marketing company profile when compared to partnership types of company or sole trader, hence making it easier for them to sell the company in the future.
Moreover, it has been said as well that through limited company formation, it is much easier to involve prospect investors to help in raising capital funds for the company by means of selling shares or issuing shares to them rather than coming up with a much more complicated and complex partnership agreement. For those of you who may be thinking about how such a thing is made possible, well, that is because limited company formation is known for having the transparency and the credibility towards their suppliers, their customers and their investors as well. All in all, limited company formation carries a wide range of benefits that sole trader and partnership companies do not possess.