Register a company

5 Key Reasons You Should Incorporate Your Company

Incorporating a company comes with its share of legal regulations and requirements. So for a business owner who is already operating successfully, or for an entrepreneur who is considering launching a new business venture, it may beg the question, “Why should I incorporate my business?”

Below we do a countdown of 5 of the benefits of company registration that may be worthy of your consideration:

5. Safeguard Your Company Name and Brand

The first step in the company formation process is to verify the availability of a company name. That means that once you have registered your business entity under your company name, it is protected and cannot be used by any other organisation. 

More than that, company registration also safeguards your brand, giving you more control to protect your brand reputation.

4. Build Customer Trust

Company incorporation helps to reinforce consumers’ perceptions that the company is legitimate which automatically engenders a level of trust. This can be a strong competitive advantage over competitors that operate without the cloak of officiality.

3. Raising Capital

Business man offering business form to be signed
Incorporating a company can make it easier to raise capital

The advantages of trust also extend to when it comes to financials, potentially making it easier to qualify for business loans, for example. 

Opening a business bank account and starting to build lines of credit may also be easier for incorporated companies. For example, we are pleased to offer all our UK-based company formation clients an entirely free fast-track business banking referral service to help get your company off to a solid financial start.

2. Protect Yourself Financially

Hands writing on a form
Registering your company can help reduce your tax deductions

A major advantage of company incorporation is the ability to protect yourself financially. Business owners are fiscally responsible for the liabilities of their businesses. Your personal assets can be seized to pay off company debts. When a company is incorporated, however, in the event of any legal challenges, personal losses are limited to the amount that has been invested into the company, and personal assets are protected.

1. Minimize Tax Deductions

One of the primary advantages of company incorporation is the opportunity to minimize tax deductions. While companies are subject to more stringent reporting and higher fees than sole proprietors, there are tax certain tax advantages:

  • Keep Your Personal Taxes Separate from Your Business’ Taxes: Having an incorporated company enables your tax advisor to explore your business tax rate vs. your personal tax rate. If your business tax rate is lower, registering your company may be the right choice for you
  • Income Distribution
    • Incorporating your company allows you the option to redistribute portions of your income to family members who have been made shareholders of the company. If these family members are in a lower tax bracket it can significantly reduce the amount of tax you are required to pay
    • Incorporation also enables you to split your earnings into dividend payouts and salary payments. A personal tax self-assessment and corporation tax review can help you maximize your earnings by identifying the optimal dividend vs salary split which can also have a significant impact on your ability to reduce your tax deductions.

So, whether you’re a startup, contractor, business partnership, not-for-profit organization, are already operating, or are looking to set up a new company with any other business model, we are ready to help you register your company in the UK quickly and easily, with our range of company formation packages designed to suit every business model and budget.


About 121 Company Formation

121 Company Formation is one of the UK’s leading online company formation agents. We have helped over 50,000 entrepreneurs register a company in the UK. We offer the most comprehensive range of services including company formation packages that start at just £15.95, administrative, accounting, and bookkeeping services to support you and your business before, during, and after the incorporation process.

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