What company type would you recommend for a web designer?

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I am a freelance web designer, but I am ready to take things to the next level. I would like to form a real company, take on staff and expand - make a real run at it, if you take my meaning. But what is the best type of company for this kind of business?

Answers

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You could benefit from setting up a company limited by shares or a limited liability partnership (LLP). Both structures will provide you with limited liability if your business runs into any kind of financial difficulty, but they are vastly different structures in many ways.

Limited companies can be set up by one person. You would pay 20% Corporation Tax on your profits but you could reduce your personal tax and National Insurance liabilities if you paid yourself a mixture of a salary and dividends. This is one of the biggest draws for a lot of people.

LLPs require a minimum of two people. This is not ideal if you want to set up the business on your own. You would not pay Corporation Tax through an LLP - as a partner, you would pay Income Tax on the profits you make. The same would apply to the other partner(s). This structure is not as tax-efficient as a company for higher rate taxpayers.

a year ago
 

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