Are you a business owner or company secretary? Here are your investing options

More companies are investing spare cash in the hope of building their wealth to support future business growth. In the same way that individuals might choose to put their money into shares, funds or other asset classes, companies can also open an investment account and put their money to work in the markets.

A Limited Company Dealing account is a lesser-known way to invest. A director or secretary of a limited company can open one of these accounts in their company’s name and use it for putting money into a range of investments. There’s no limit to how much your company can invest and, importantly, the money can be withdrawn at any time.

Investing the company’s spare money could give your business a boost in the future. For example, you might run a company that is doing well enough to generate cash surplus to your current needs. By investing that money, it might be possible to make a greater return than parking the cash in the bank. After a while, you might have generated enough returns from investing to fund a new business line or even lay the groundwork for opening another site.

Traditionally, a company might have borrowed money from the bank to fund their growth plans or tapped up external investors for cash in exchange for equity in the business. However, not everyone feels comfortable taking on high levels of debt or bringing in external investors as that dilutes their ownership. That’s where investing can come in handy – it’s an alternative route for making money to take your business to the next level.

Investing is not a risk-free activity and anyone opening a Limited Company Dealing account should understand that the value of their investments can go down as well as up. There is no guarantee that you will make greater returns versus cash in the bank, and some investments might be hard to sell quickly. That’s why it is important to think wisely about where and how you invest, and to understand the rules around tax.

If you’re not sure how an investment works or do not feel comfortable making these decisions, it’s worth talking to an independent qualified financial adviser.