1) It's very easy for a sole trader or freelancer to incorporate. There's a slight tax advantage to drawing dividends from a limited company rather than paying

1) It's very easy for a sole trader or freelancer to incorporate. There's a slight tax advantage to drawing dividends from a limited company rather than paying yourself a salary, so a lot of these one-man-band companies technically have no employees. 2) A UK limited company is a flexible financial wrapper for all sorts of organisations, many of which aren't businesses in the traditional sense. A significant number of community groups are registered as limited companies rather than charities, even if they are run on an entirely voluntary basis. 3) The extreme convenience of the British system and relatively favourable tax rates mean that a lot of foreign companies choose to incorporate in the UK, even if they have no presence there. Until the introduction of the mini-GmbH in 2008, many German small businesses chose to incorporate in the UK, because dealing with the cross-border issues was easier than dealing with German bureaucracy. If I were a startup founder based in a developing or middle-income country, my first impulse would be to open a UK limited company - it takes about 20 minutes, costs about £20 and gives you a sound basis to operate as an international business. 4) The annual returns for a small limited company are so straightforward that it's often easier to keep a company dormant rather than formally wind it up.