Setting up a limited company can be a smart move for your business, providing legal protection and tax benefits. Here’s an overview of the process involved.
Setting up a Limited Company
Choose a Company Name
Select a name that is unique and not already in use by another registered company. Ensure it complies with legal requirements, such as not containing offensive language and being distinguishable from existing trademarks.
Registered Office Address
This is the official address where legal documents, notices, and correspondence will be sent. It must be a physical address in the UK, not a PO Box, and be available for public inspection.
Appoint Directors and Shareholders
Determine who will manage the company (directors) and who will own shares (shareholders). Directors must be at least 16 years old and not disqualified from acting as a director.
Memorandum and Articles of Association
The memorandum outlines the company’s name, registered office, and objectives. The articles of association set out the rules for the internal management and operation of the company.
Register with Companies House
File the necessary documents, including Form IN01, with Companies House. This can be done online or by post. Pay the registration fee and wait for confirmation of incorporation.
Obtain Necessary Licenses and Permits
Depending on your business activities, you may need licenses or permits from local or national authorities. Examples include a premises license for selling alcohol or a permit for handling hazardous materials.
Set Up a Business Bank Account
This would be my top tip. Open a separate bank account for your business transactions. This helps with accounting, tax reporting, and maintaining clear financial records.
Register for Corporation Tax
Inform HM Revenue and Customs (HMRC) that your company is liable for corporation tax. This must be done within three months of starting to trade. You’ll receive a Unique Taxpayer Reference (UTR) and information on filing tax returns.
Consider VAT Registration
If your annual turnover exceeds the VAT threshold (currently £85,000), you must register for Value Added Tax (VAT). This involves charging VAT on your goods and services, and submitting VAT returns to HMRC.
Keep Proper Records
Maintain accurate accounting records, including sales, expenses, assets, and liabilities. This is essential for fulfilling legal requirements and preparing financial statements. I would suggest using bookkeeping software.
Understand Legal Responsibilities
Familiarise yourself with the legal duties of directors, such as acting in the company’s best interests, avoiding conflicts of interest, and keeping proper records. Failure to comply could result in penalties or disqualification.
Seek Professional Advice
Consider consulting with an accountant or legal advisor throughout the process to ensure compliance with regulations and optimise tax efficiency. They can provide valuable guidance tailored to your specific circumstances.
Helping you with Setting up a limited company
Contact us now if you need help with this
Or just email us if you want our:
- New Business Start-up Checklist, or;
- Business Plan Template, or;
- Help with
- Bookkeeping
- Software
- Accounts
- Taxes
Achieving Success with your business
If you’re just starting your new business venture or struggling with the steps to the next level contact us now.
We can help you with this and much more
Get ready for success with Moore Financial Management
We can help you with all of your compliance obligations such as:
- Self Assessment Tax
- Making Tax Digital
- Corporation Tax
- Filing Accounts
- VAT
- Payroll and Pensions
But also the things you really need to increase the chances of your business being a success
- Management Accounts
- Cashflow Reporting & Forecasting
- Budgets
- Real Time up to the minute information
These are the things that add value and the information you need in order to make the correct business decisions
If you’re not confident with any of this or don’t have the time, getting a licensed accountant to do it for you can actually save you money. It can free up your valuable time which you can use to concentrate on your business. You can also benefit by knowing it has been done correctly and on time.
Mistakes can be costly.
As can missing deadlines.
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