An umbrella is a limited company which is already in existence and you use it for the duration of this contract.
It's a bit like RENTING a COMPANY if you like.
source: Transcript of registration call Accounting Freedom posted on Umbrella Tales, Umbrella Supermarket
Clearly there are times when it makes more sense to rent and not buy.
Generally in business the rent or buy decision comes down to this question
"Am I buying to build an asset, to increase income and capital value, and if possible can I do it in such a way that it delivers the value without me, so it is attractive to an investor and can be sold for more than I paid for it? "
Is this why you want to set up your own company"? OR "Would it be more cost effective to simply rent and retain flexibility without the headaches.."?
So a good question and admit I quite like the analogy. So what is your intention? What are you looking to achieve? Why would you rent? When would you buy?
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