Set up your Limited Company

Dec 15, 2023 | Formations, Limited Company

Setting up your Limited Company

Connecting businesses and limited company formationSetting up your new Limited Company can be a bit daunting for a lot of people. Actually it is much more straightforward than you think! But, we do this setup all the time so of course it’s easy for us to say that!

Initially, there are a few pieces of important information you need to collect before we get you on your way. Once you have done all the fun stuff, we are on hand to advise the rest and take the pain away. We will setup the limited company for you.

Next, we explore the type of information needed and the steps involved to set up your limited company.

  1. Choose a Limited Company Name. Do a check on possible company names – it is always best to come up with three options in advance. Therefore, when you perform the search, you will have three names to choose from if one has already been snapped up! Ensure you follow these guidelines set by Companies House.
  2. Registered Office Address. An actual physical address within the UK is needed for official letters to be sent to. But this can be your home address or a different location, such as a serviced address. It is always better to registered for an address away from your home for privacy reasons.
  3. Company Directors and Shareholders. You need at least one director (who can also be a shareholder). Directors are responsible for managing the company. Shareholders own the company. You can opt for family members over the age of 16 to become a shareholder and/or director of the limited company.
  4. Find a Qualified Accountant. Once you have gathered the relevant information, it’s time to find a (preferred) local qualified accountant within a close proximity of your business premises. Most accountants will work with you and your business from an online location, so distance might not be an issue. We offer face to face and online meetings, and telephone calls. So, it’s best to ensure your accountants are flexible to fit with your business needs.
  5. Memorandum and Articles of Association. These are legal documents that outline the company’s structure and rules for running the company. They usually come as standard upon company formation, but you can appoint a solicitor to rewrite this document for more complex setups.
  6. Register with Companies House. You’ll need to provide information about your company, including its name, address, directors, and shareholders. You can do this online or by mail, however online is much quicker. The company will be registered within 24 hours of the formation application being lodged.
  7. Register for Corporation Tax. You’ll need to register your company for corporation tax with HM Revenue and Customs (HMRC). This is usually setup in line with the Companies House application form.
  8. Open a Business Bank Account. You’ll need a separate bank account for your company’s finances. It is recommended to apply for the business bank account as soon as you have received the official documentation, either by email, or via Royal Mail.
  9. VAT Registration (if applicable). If your company’s VAT taxable turnover exceeds the threshold of £85K, you must register for VAT. Businesses can apply for voluntary VAT registration. This may be due to being a business that usually receives a VAT repayment from HM Revenue and Customs. It may also be due to the fact that you will quickly exceed £85K soon after forming your limited company.
  10. Running a payroll or CIS (if applicable). If you plan to employ staff or are in the Construction Industry Scheme, you’ll need to register as an employer with HMRC.
  11. Register for Self-Assessment. Shareholders and limited company directors will need to report dividends to HM Revenue and Customs on an annual basis. The amount drawn as dividends will be declared by the director within an annual personal tax return.
  12. Licenses and Permits. Depending on your business activities, you may need specific licenses or permits to operate legally. You will need to do the research for your sector.
  13. Accounting Records. You must keep accurate accounting records for your company. Businesses usually subscribe to cloud accounting software, such as Xero, to ensure accurate reporting.
  14. Annual Filing. You’ll need to file accounts to Companies House and HMRC annually; usually on the anniversary of the date you opened up your company. The company also needs to file an annual confirmation statement with Companies House. The confirmation statement ensures that shareholders and directors personal information is kept up to date.

We highly recommend every business owner to seek professional advice before setting up a limited company to ensure all legal requirements are met. You don’t want to start on the wrong footing with HMRC, or the law.

How can we help?

We get asked to set up limited companies frequently for our existing and prospective clients. In fact, some of our clients have been trading as sole traders for a number of years, and they then look to incorporate from there. There are many reasons that business owners prefer to set up a limited company. Some examples of this could be reputation, longevity of the business, or for better tax management.

Some companies need more than one company formation and ask us to set up a sensible group structure for them. The reason for this is our clients may have a few trading units/limited companies that they may wish to grow initially, and sell at a later date and keep the other trading units.

 

Get in touch!

Whatever the reason, you will be in safe and good hands with Blyth. We are experienced and chartered accountants regulated under ACCA (Association of Chartered Certified Accountants). Contact us now: hello@blythaccountants.co.uk or call our office on 0141 266 0468

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