How to Setup a Limited Company

On July 24, 2013, in Basic Startup Tips, by admin

Setting up a limited company is much easier than you may think, and can be one of the best ways to build your business. It can also make you look more professional in your business approach to, as it can give you an official status within the business world. The great thing about running your own business as a ltd company is that you can truly define your own brand, and you can also become more tax efficient over being a sole trader, but we always suggest talking directly with an accountant to get the very best advise. Something you may want to think about when setting up a business is the cost, some companies or accountants charge a fortune to do this for you, but it is actually easier than you may think, and here’s why…

Follow our simple procedures to be up and running in no time at all…

1. Choose your desired Limited Status

There are two main types of companies:

  • Private Limited Companies – Ltd’s
  • Public Limited Companies – PLC’s

With the majority of freelancers like website designers, contractors for example builders who start up a business going for a private company Ltd, and by using this choice you only need one director and this director can also be the secretary. In the old days you would have need 2 people. As PLC’s companies must have a larger share capital of over £50,000, and at least two shareholders, two directors and also a qualified secretary, there are definitely more hoops to hop through here.

Setup your New Limited Company

2. Start the new company process

Simply go online and do a search for “Setting up a new company” or similar and you have pages of results and there are some great companies online.

  • We suggest choosing your name first, and checking it is available. This can be done via Companies House Web Check.
  • Use a Company Formation agent.
  • Or even go direct to Companies House.

You can check with either the formation agent or your accountant on the correct procedures when setting up a new business, especially when you get stuck online!

3. Completing the Incorporation Procedure

With Companies House being responsible for all Limited Company Registration in the UK. Their online website which is regularly updated can give any further detailed information.

The following documents must be completed and returned to Companies House, although if you are using them direct, a formations agent or your accountant they will do this automatically for you.

  • Memorandum of Association – Limited Company name and contact details
  • Articles of Association – basically outlining the directors, shareholders etc. (This is normally provided by the Company Act that sets up the Limited Company).

4. Remember the other legal bits too!

  • All Limited Companies must be registered at Companies House.
  • Annual returns and annual accounts must be completed and filled also. You should at this point get a local accountant, if you haven’t already, as they will take care of all this for you. But if you decide to do this yourself then you should get reminders about specific filling dates, if you don’t get in contact near the time, you won’t any fines or poenalties for late returns!

Be Successful and Make your New Business Succeed from Day One.

The key to a successful new company is to get the correct advise, ideally look up 3 local accountants and see all three in person to gauge their knowledge, expertise and helpfulness. Also note there fees and charges for various accountancy works throughout the year, some will offer a monthly charge at a set fee, others will simply charge per job. Either way find someone who can grow with you and help your business in years to come. Ideally once you setup your brand new business you will need some kind of marketing or website design, find a local business that can grow your initial thoughts and ideas, and truly build your new company.