Understanding the advantages of setting up a limited company

Starting a business is a bold endeavor, but its success doesn’t rely solely on bravery and the willingness to take risks. Proper preparation is key in overcoming challenges and ensuring everything will go as planned. There are many variables at play and a certain degree of uncertainty that can spell trouble for unseasoned entrepreneurs.

Many people these days, choose to run their activities as sole traders, out of the desire to simplify things. But although it’s easier to start as a sole trader than to opprette aksjeselskap, the advantages provided by the latter option cannot be denied. So, if you want to find out more about the benefits of setting up a limited company, this short guide will help shed some light on the matter.


It’s definitely not easy to opprette bedrift given all the time, effort, and money you have to invest into it. However, if you decide to set up your business as a limited company, you’ll worry less about paying taxes, which is a huge financial advantage over operating as a sole trader. When you’re just starting out your entrepreneurial journey, every single penny counts, so saving on tax and other contributions can make a significant difference to your business budget.

Limited liability

It’s not called a limited liability company for nothing. When you opprette AS, apart from financial advantages, you’ll also be able to enjoy greater peace of mind. That’s because with a limited company you’ll face fewer risks. Therefore, if your company incurs debts or if it goes bankrupt, that won’t affect your personal life in any way. Since you and your company are two entirely separate entities, you won’t suffer the consequences of these events.

More funding options

It’s difficult to get a business off the ground without the necessary resources, and finding them is not an easy thing to do. However, you have greater chances of securing funding as a limited company than you have as a sole trader. With fewer risks involved, lenders and investors will be more willing to finance your business, so you’ll be able to obtain the money you need and grow your company.

Professional image

In the business world, people do judge a book by its cover, so having a good image can go a long way in helping you evolve and gain a competitive advantage. If you want to establish yourself as a trustworthy and reliable business, setting up a limited company is the best option. A limited company is often regarded as being more professional and thus it will give you a better status in the business landscape.

Transfer of ownership

If you decide to transfer the ownership of your business, if one of the shareholders decides to retire or if you pass away, the legal procedures for transferring ownership are less cumbersome with a limited company. This will save you and the rest of the parties involved in the business a lot of trouble, should any of the above-mentioned circumstances occur.



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