What must owners of limited companies be aware of regarding their tax liabilities?

Owners of limited companies must understand that the tax structure differentiates between the company itself and its owners. This means that the owners, usually as shareholders, are taxed separately from the company on their income, which can include salaries, dividends, and other benefits they receive.

In a limited company, the company pays corporation tax on its profits before any earnings are distributed to owners. Once profits are distributed as dividends, the owners then need to pay personal tax on those dividends. This separation in taxation highlights the need for owners to be aware of their tax obligations at both levels – the company’s tax liabilities and their own as individuals.

The other options are misleading. For example, stating that owners have no tax liabilities overlooks the personal tax responsibility tied to their income from the company. The idea that owners are only taxed on dividends excludes the possibility of receiving a salary, which would also be taxed. Lastly, asserting that owners pay no taxes if liabilities are limited disregards the fundamental principle of taxation that applies to personal income, regardless of the company's structure.