But remember that in some circumstances the court can order that a Director pay some or all of the company's debts. Outside investors can put money into the business by buying shares, and take a share of the profits, without having to become involved in running the business. It can be easier to borrow money from banks and other institutions, because a company can give security over all its assets and stock in trade by way of a floating charge. You will be an employee of the company. This means that the company has to deduct PAYE tax and national insurance when it pays you any money.
Tax is payable nine months after the end of the financial year, regardless of when that is.
Banks, landlords and major suppliers will probably require personal guarantees from the Directors for money owed to them. You have to comply with detailed requirements of the Companies Acts. It is usually advisable for a new business to start as a sole trader or partnership, where there is a considerable cash flow advantage in the arrangements for paying tax and the lower professional fees. In this case the advantage of limited liability to protect you and your family outweighs the cash flow disadvantages of a company. If your product is in the field of medicine or high technology, you should consider this carefully.