This article is a summary of a YouTube video "What is a private limited company by shares?" by Vertice Services
TLDR A private limited company by shares provides limited liability for shareholders and the option to distribute profits as dividends, but it is important to separate personal and company finances and consult with a knowledgeable accountant for guidance on growing the business.
A private limited company by shares provides the advantage of limited liability, where shareholders are only responsible for the value of their shares in case of bankruptcy.
The directors and shareholders of a private limited company are not personally responsible for the company's debts, as long as they haven't broken the law to register the company.
"A limited company must be registered in Companies House and submit company accounts to Companies House and HMRC."
Shareholders of a private limited company have the option to either retain the profit for future use, reinvest it back into the company, or distribute it as dividends.
The concept of separating personal and company finances is important to ensure clarity and avoid mixed responsibilities and duties.
"Interim dividends allow shareholders to cash out on a monthly basis, while final dividends can be cashed out at the end of the financial year."
Dividends in a private limited company by shares are subject to taxation based on specific brackets, with different percentages applied depending on the amount earned.
"Find a very good accountant who shares your goals and values to receive valuable advice on growing your business."