The government has recently come up with an initiative to encourage business enterprise. A business agency has been set up by the government and you have been appointed as the business adviser.

Aslam has arranged to see you and talk through his idea for establishing an office cleaning business. During the first meeting, you discuss many issues with Aslam, one of them the is what will be the most appropriate form of business organization. It turns out that he has strong views on the subject:

‘My brother-in-law’s accountant set up a company for him and it’s been a disaster from start to finish. He is constantly being hassled to provide information for the taxman. Every year he has to pay the accountant to produce a lot of useless information to send to the Registrar of Companies. The accountant told him it was better to have the business as a company rather than being a sole trader but he thinks he’s been given bad advice.

Advise Aslam on the pros and cons of setting up a limited company.

Answer rating: 100% (QA)

A limited company is the structure that bridges between a full public company and a partnership or sole trader or proprietor It gives the business a l... View the full answer