Most of the Stockport Business Owners we work with choose to begin trading as either a sole trader, through an umbrella company, or by starting up their own Limited Company. For many Stockport sole traders, the time comes when setting up a Limited Company is the more effective way of getting more from your business.
For many business owners, trading as a limited company gives you have the opportunity to to define your own brand, run your business in the most tax-efficient way and still own everything that you. Additionally, there are numerous occasions where as a Limited Company, you can pitch for work that you wouldn’t be able to get as a sole trader.
If you decide to go down the route of company formation route, here are four simple steps that you will need to take.
4 Steps to Setting up a Limited Company
1. Decide which type of Limited Company is best for your business
There are two types to choose from:
- Private Limited Companies (LTDs)
- Public Limited Companies (PLCs)
The decision on which to go for will, for the most part, be based on the value and size of your business.
PLCs must have a share capital of minimum of £50,000. They must also have at least two shareholders, two directors and a fully qualified company secretary.
This means that most freelancers, contractors, startups and small businesses will have to opt for an LTD.
2. Company Set Up
Although this might seem the trickiest and most bureaucratic part of the process, it is actually the simplest. You can set up your company online, using this link yourself in about ten minutes for very little cost.
Bear in mind, though, that you will have to supply certain personal details to help Companies House identify you as a company director.
If all your information is correct, Companies House can have your limited company formed in a few hours. For any help with this, a good accountant can help you collate the information you need and talk you through the process.
3. Complete the Incorporation Process
Companies House is the body responsible for all limited company registration in Britain. The Companies House website provides detailed information on how and what to do in setting up your limited company.
As part of the process, the following documents must be completed and returned to Companies House in order to complete the incorporation process.:
- Memorandum of Association – limited company name, location, business type.
- Form 10 – Director’s names, addresses and registered limited company address.
- Form 12 – Statement that your limited company complies with terms and conditions of Companies Act.
- Articles of Association – Outline of director’s powers, shareholder rights etc. – this is normally provided by the Company Act that sets up the Limited Company.
At Steven Glicher and Co, accountants, we are able to complete these and return them on your behalf.
4. Fulfil all legal requirements
As a limited company director you do have certain legal responsibilities that you must fulfil. These include:
- Your newly formed Limited Company must be registered at Companies House.
- Annual accounts and Annual Returns must be completed and filed with Companies House every year. To learn more about what you need to file, talk to us.
- HMRC must receive abbreviated accounts every year.
- An annual HMRC Corporation Tax return must be completed and paid within nine months and one day of the limited company year end, every year.
For these aspects of your company registration a qualified accountant is your best resource.
For information about setting up your own company, or for any other company compliance questions, contact us at Stephen Glicher and Co Accountants