We had a chat with John Flanagan at Rollits about starting a business and the benefits offered by a limited company structure.
John Flanagan is a Partner and the Head of Corporate at Rollits. He specialises in corporate law and has wide-ranging experience in handling mergers and acquisitions, large refinances, and advising on company structures and corporate governance for companies from SMEs up to listed company level. The coronavirus pandemic saw large numbers of people leaving their employed roles to enter the world of self-employment, so we decided to pick John’s brain about what to consider when starting a new business.
“I deal with companies in various sectors that are interested in buying, selling, or setting up new companies,” said John. “We regularly come across clients who are a sole trader under their own name, they’re doing well and have reached the point where they want to change to a limited company, which limits personal liability. This way, if something goes wrong in the future, the individual is protected and most of the liability should stop with the company.”
John said that setting up a limited company is also an effective way to protect your personal finances as a business owner: “It’s a worst-case scenario but many clients ask if they would lose their home if their business got into difficulties. The good news is that if the business is a limited company, their own finances and property are separate from the business accounts, unless personal guarantees have been given.”
John and the Corporate team at Rollits also help clients who are looking at expanding their reach and client base: “Banks will prefer dealing with a limited company, as the structure offers a higher level of transparency. Accounts are filed annually with Companies House, which identify the shareholders and provide other key financial information. Many larger businesses also prefer to deal with a limited company rather than a sole trader, so there are a number of benefits that come with setting one up.”
If you’re thinking about registering a limited company, John explained how Rollits can support you: “We provide advice regarding Companies House documents and make everything stress-free. Where clients have more than one shareholder, we can help you to create a shareholders’ agreement that outlines what the shareholders each expect of each other, how profits are shared out, and other key matters. It can prevent deadlock if there’s ever a disagreement between shareholders.”
Another service provided by Rollits is company secretarial: “When becoming a limited company the owners and directors take on additional legal and governance responsibilities; our company secretarial service can assist with these obligations and ensure that everything is dealt with promptly and submitted to Companies House. Examples of these obligations are keeping up-to-date registers of shareholders, directors, charges, and so on, which Rollits can take off your plate. We work with everything from owner-managed businesses to multinational groups with multiple subsidiaries.”
If you require further advice regarding setting up or developing a limited company, or with company secretarial support, we recommend getting in touch with Rollits to explore your options.