Setting up a Limited Company

Being a business owner, you may hope to understand more about the limited company legislation. A limited company’s legal status is differentiated from that of its directors and stockholders. A limited company, as opposed to a sole trader, can be useful since the owners of a limited company are legally accountable for the business’s obligations, but only to the degree of the capital they invested, thus the company is liable if problems occur. Private Limited Companies (LTD) and Public Limited Companies (PLC) are the two types of limited companies.

When beginning the process of creating a new limited company in the United Kingdom, you must first determine what sort of limited company you wish to establish. The most popular option for establishing a limited company in the UK, whether you operate a small business, are a freelancer or contractor, is to create a private limited company.

Choosing a name for your Company

Your business name should be original, and you may use a website to look for names that have previously been taken. It is also worth  trademarking your company name, which is essential so that no one else can use it for their business.

If you want to form a private limited company, the name can include the words Limited or Ltd in the title, such as ‘allnumbers’ Limited or ‘allnumbers’ Ltd. Choosing a name for your business can be exciting but difficult; just make sure you favour it because it will appear on your buildings, cars, website, and any workplace documentation.

Picking the Director & Shareholders for your company

After you’ve selected a name and registered trademarks, the next stage in establishing a business is to pick a director. You should also think about who your company’s stockholders or guarantors are.

The company’s management is assigned to the board of directors. They are responsible for a variety of tasks, including maintaining corporate records and reporting any changes. They must also file the company’s financial statements and your Corporation Tax Return, as well as pay the Corporation Tax. Unless the corporation is a non-profit organisation, they must also register for Self Assessment and submit a personal Self Assessment tax return every year. A corporate director can also employ individuals to run the company’s day-to-day activities. A private limited company does not require the services of a company secretary. A corporate secretary can also be a director, but not the auditor of the business.

At least one shareholder, who could also be a director, is required for a limited corporation. You must disclose the number of shares and their total value (share capital) as well as the contact information of your shareholders during the registration procedure.

Opening your Limited Company

The next stage is to establish a limited liability corporation, you must include information that includes what sort of business your limited liability company will be, This is accomplished by assigning your company a SIC (Standard Industrial Classification) code. You will also need to add addresses for which you want to register to your company.  Your company’s ownership structure, including the number of shareholders and the number of shares they will possess.

The Incorporation Procedure

The Incorporation Procedure is completed when the following documents are submitted to Companies House (the company which is responsible for limited company registration in the UK). These documents explain how you’ll operate your company:

• Memorandum of Association: This is a legal document that all of your shareholders must sign before the business may be established. It includes your limited company name, address, and kind of business.
• Form 10 contains the names, addresses, and registered limited company address of the directors.
• Form 12 certifies that the limited company in topic conforms with the Companies Act’s provisions and limitations.
• Articles of Association: a set of written guidelines for how the business should be conducted, agreed upon by the directors and shareholders.

After that, your limited company is ready to go. You should retain all corporate documents, as well as financial and accounting records, to ensure that you are aware of your commitments.

Some advantages and disadvantages of setting up a Limited Company

Operating through a limited company has a number of benefits and drawbacks. Being your own employer gives you the freedom to work as you choose, as well as other perks like tax planning and higher take-home income. However, there are a few things to think about before taking the plunge. Expenses can be claimed for anything that is entirely regarded as a company expenditure. Trading as a limited company allows you to claim a greater variety of expenditures, including accountant fees, machinery, programs, telephones, transportation, broadband, and much more. It might be worth hiring an accountant at www.allnumbers.co.uk to help you manage your money so that you can spend more time working on your company. Working via your own limited company does require some commitment, but most contractors estimate that they spend 20 – 30 minutes each month managing their business.

Each year, you must file your accounts with Companies House, which will be public record. Each year, you’ll have to file your accounts, business tax, and Corporation Tax estimates with HMRC. If you hire an accountant, they will assist you with all of these issues. If you have a short-term contract and subsequently decide to return to regular work, running a limited company might be costly because you will still be obliged to produce end-of-year accounts.  Anything shorter than a couple of months is considered a short-term contract, however it depends on your daily contract value.

For any questions or help regarding setting up a Limited Company be sure to visit our website at www.allnumbers.co.uk