being limited downside ...everyone can see your accounts??

building

thanks to those who helped with info on limited company. my dad says that he sees another downside to being limited and that is that everyone sees your business. i am not sure how this is really a downside. he seems to be saying paying 40% tax might be better than having everyone view his info!

any tips to help him would be appreciated. thanks in advance.

Mark7799

Yes everyone can see your accounts but how many want to make the effort to do so?

I would have thought a bigger down side may have been if you try to borrow as a limited company you will probably be asked for personal guarantess (or mortgage debentures if the business has assets) from the Banks.

zareer

don't forget also that if you are a small company (less than 50 employees, gross assets less than £1.4m etc), then you can file abbreviated accounts, which limits the amount of information you need to provide to Co House. For instance, you don't need to provide a profit and loss account nor do you need a director's report in the accounts. Though your overall reserves (and hence profit) is shown in the balance sheet, these measures really limit the amount of information that can be used by your competitors.

NeilW

Technically the balance sheet only shows assets and retained profit. After you have messed around with pension contributions, salary payments and dividends, the figure is largely meaningless.

The abbreviated accounts are really there so that creditors and lenders can see if you have any collateral. They show little else because they only represent a point in time that is long past.

NeilW

WHA

NeilW wrote:

Technically the balance sheet only shows assets and retained profit. After you have messed around with pension contributions, salary payments and dividends, the figure is largely meaningless.

The abbreviated accounts are really there so that creditors and lenders can see if you have any collateral. They show little else because they only represent a point in time that is long past.

NeilW

Quite true, however, there are new rules that may change this position. In the very near future, I understand that dividends will have to be shown on the balance sheet rather than the profit and loss account. Secondly, there are proposed company law changes that will effectively remove the option to file abbreviated accounts, so more detailed accounts may be open to the public in the next few years. That said, I can't imagine why someone would be so bothered that no-one else can see their accounts - after all banks, finance companies and major suppliers & customers often require sight of the accounts anyway, and plenty of information is available from credit-checking companies. The vast majority have no problem with other people seeing their accounts.