How To Set Up An Ltd

Setting upwardly as a limited company is one of the smartest and most tax-efficient ways to get paid for your work.

With a limited company ready, you go to define your make, own everything you do, run your business organization in the most taxation-efficient style, and pitch for work you wouldn't be able to get equally a sole trader.

If you're not quite sure what it all entails, cheque out our beginners guide to limited companies. You can and then register a visitor with our easy to apply Crunch Formations service.

If yous're ready to larn how to gear up a express company, here's what you need to know.

If you don't have fourth dimension to read this at present, no trouble! Our jargon-gratuitous, downloadable PDF guide covers everything you need to know virtually starting a limited company.

How to fix a express visitor in four simple steps

1. Choose which type of limited company to set

In one case you've decided to gear up a limited company, you have to cull which blazon yous wish to form. The 2 main choices are:

• Private Limited Companies (LTDs)
• Public Limited Companies (PLCs)

Most freelancers, contractors, get-go-ups and small businesses volition opt for a Individual Limited Company, as PLCs must have a minimum share capital of £fifty,000, at least 2 shareholders, two directors and a qualified company secretary.

There'southward no minimum share capital requirement for LTDs. You can prepare a LTD with a single share worth £1 if you lot wish.

2. Pick your visitor name

This bit is equal parts the most fun and most frustrating part of the whole process for most new express companies. Much like a spider web address, your company proper noun has to be completely unique. Y'all tin can differentiate in a few ways to guarantee a unique name – for example, a limited visitor name can use either "Limited" or "Ltd." (i.e. "Crunch Limited" or "Crisis Ltd."). You lot can find available company names using our Crunch Formations visitor name checker, just with over 1,500 companies formed every day, your preferred proper noun may not be available.

Stuck for ideas? Hither are some means to create unique company names.

3. Forming a limited company

If step two was the fun and frustrating part, this ane'due south the catchy and bureaucratic function – or at least it'south seen to be. It's actually actually uncomplicated if you're organised though. With Crunch you tin go online and ready your limited company yourself in about ten minutes, and all for the price of a takeaway pizza.

Y'all just have to supply certain personal details to help Companies Business firm identify you lot as a company director. These include:

• Letting them know what type of business concern your express company will carry out past submitting a SIC code (Standard Industrial Classification code) for your business. Yous tin can select the most appropriate code from the Condensed SIC code list online at Gov.u.k. which is maintained by Companies Business firm.
• Make up one's mind what addresses you want to register for your concern. Y'all'll need to cull your Registered Office Accost, and provide a service accost. We've written a split commodity about the types of addresses yous must provide to Companies Business firm and how to avert potential impacts on your privacy by not publicising your residential accost.
• Determine on the buying of your visitor – how many shareholders do you lot desire and how many shares will they accept each (known as their shareholding)? We explain this in our article, 'What are company shares, share value & share capital letter?

Once y'all've washed this, you're good to go. Companies House will often have your limited company formed in a few hours.

4. Complete the incorporation process

Companies House is responsible for all express visitor registration in the United kingdom of great britain and northern ireland. Their website provides detailed data on how to go most the procedure, or you lot can use a service like our Crisis Formations to simplify things.

The following documents must be completed and returned to Companies House in order to complete the incorporation procedure. Often, your visitor germination agent or accountant volition complete these on your behalf:

• Memorandum of Association – limited company name, location, business type
• Form 10 – director'southward names, addresses and registered limited company address
• (this doesn't take to be where y'all work from only will exist where the legal correspondence from HMRC and Companies House is sent)
• Form 12 – states the limited company complies with the terms and conditions of the Companies Act
• Articles of Association – outlines managing director's powers, shareholder rights etc. (this is oft provided by the formations company that sets up the limited company).

And that'south how to go a limited visitor!  What do you need to practise next?

Well, there are a couple more $.25 of admin yous should take intendance of and there are those pesky reporting and filing responsibilities you demand to stay on elevation of.

Simple admin start, you lot'll demand a business organisation bank business relationship for your limited visitor. Nosotros've written a handy guide to what to look for in a expert business bank account.

You'll also need some modest business insurance to cover y'all and your business organization for any work y'all're doing.

Download and continue our handy Business organization Insurance guide

Download Free PDF Guide →

How much does it cost to fix a limited company?

Register a limited company costs £x, or is completely gratuitous when you sign upwards to accounting with Crunch. We'll even refund your fee if you accept out our Small-scale Business concern Insurance, or open a Barclays business organization bank account through u.s..

We've helped prepare over 10,000 limited companies. Get your express company prepare up in just a few minutes with Crunch Formations.

Your duties and responsibilities as a express company director

Nosotros've written a detailed article with all the info about your responsibilities as a limited company managing director, what y'all need to file and what the deadlines are. But in summary, as a limited company director, you have certain duties and legal responsibilities. These include:

• Your newly set express company must exist registered at Companies Firm
• Annual accounts and Confirmation Statements must be completed and filed with Companies House every twelvemonth past the due date
• You'll need to maintain and submit a record of anyone who has significant control over the express company. A person of significant control is someone that holds more than than 25% of shares or voting rights in a company, has the right to engage or remove the bulk of the board of directors or otherwise exercises significant influence or control. This is known as the PSC register.
• HMRC must receive your accounts every year.
• An annual render must exist completed and any Corporation Tax owed must be paid to HMRC within ix months and one day of the limited company year end.
• Register for Self Cess and send a personal tax return to HMRC every yr (this requirement does not apply if your company is a not-profit organisation, such every bit a clemency, and you didn't get whatever pay or benefits).
• Follow the visitor'southward rules, as shown in its articles of clan.
• Keep visitor records and report changes.
• Tell other shareholders if y'all might personally do good from a transaction the company makes.

You may appoint other people to manage some of these things day-to-solar day (for instance, an accountant), but you're still legally responsible for your company'southward records, accounts, and performance. You may exist fined, prosecuted, or butterfingers if yous don't meet your responsibilities as a manager.

Certain people are prohibited from interim as a director of a company, including persons under 16 years of historic period, bankrupts, and disqualified persons. While there is no mandatory qualification required to be a managing director, a director is required to perform the duties outlined above and must be capable of doing and then.

Equally a director, you lot must make decisions for the benefit of the company and not yourself. This may seem confusing if you are the sole shareholder, employee, and managing director, just a decision that may benefit you personally may adversely bear on the company'due south performance.

But isn't it difficult to exist a express company director?

Short reply: it shouldn't be.

Traditionally, beingness a sole trader has been thought of as the easiest option for running a small business. Equally a sole trader, your tax responsibilities are piece of cake to account for, if not necessarily as efficient as they could be. But many of our clients have enjoyed the benefits of switching from a sole trader fix-up to a limited company business structure.

Information technology seems wrong for a freelancer, contractor or small concern owner to be put off saving tax because of the perceived hassle involved.

The key to getting it right

As a freelancer, contractor or pocket-size business possessor, it's important to have the systems in place to accept advantage of the tax-savings afforded by a limited visitor without having to spend ages on irritating admin duties. You shouldn't have to pay astronomical accountancy fees, either.

Y'all'll know you've got the right accountancy solution when your accountant is doing most of the work for you and leaving you with greater take-abode pay. Being a express company director should be blissfully easy, and Crunch ensures it is.

Preparing a business plan

Writing a concern plan can help you figure out whether or not your business idea has whatever legs.

Once you're able to bear witness that you've done the marketplace research and know how you're going to provide the service to customers sold on the nuts, y'all can use your business organisation plan to convince potential sources of finance, investors, partners, and employees that you're worth working with.

Our jargon-gratis guide How to write a Business organisation Plan will give you a improve idea of how to get the ball rolling.

Maintaining your express company

There are many horror stories of freelancers or contractors who've had a nightmare with running a express visitor, either because of accountants who left them to fend for themselves or a hackneyed attempt at DIY accounting.

One of the of import jobs of a good accountancy service is to ensure that you spend as little fourth dimension on your accounting as possible. At Crunch, our service combines online accounting software with adept accountancy communication, so that you have everything you need in one place.

The bread and butter of running a limited company is drawing up and sending invoices, plus keeping a record of expenses. Both of these tin can hands be done if y'all use online accounting software, which provides templates, automatically calculates VAT (should you be VAT registered) and enables simple recording of expenses. These are the same processes you'll have been used to as a sole trader, but now you demand to make sure that you keep on top of these to sympathize how your business is performing and how much y'all tin can accept in dividends.

Preparing and filing tax returns

Our article "Limited company directors: What you need to file with HMRC & Companies Business firm" outlines your tax-paying duties and deadlines. What's important to keep in mind is how crucial it is to have a good accountant and sophisticated online accounting software (Crunch provides both) with which to take away the strain.

For case, with Annual Accounts, you barely have to practice a thing – the accountants our finish will perform all the necessary actions, leaving you to just approve your accounts. It'south annual accounts at the click of a push button!

If you're registered, VAT is simple because whenever you draw upwards an invoice, the VAT'due south automatically added. When information technology comes to an bodily VAT render, the Crisis system will practice the calculations and you tin file the return directly from your Crisis business relationship each quarter.

Dealing with your tax paying and filing duties tin become a muddle when business organization owners continue all their information in separate places. Yet, when information technology'southward all organised in ane secure online system, the information is readily available and information technology becomes significantly easier to file returns and accounts for taxes. If at that place are whatever problems, our team of practiced accountants are on hand to help.

Claiming back pre-trading expenses from your limited company

It's entirely possible that y'all have incurred business concern costs prior to forming your limited company.  You tin can claim 'pre-trading' expenses for things like:

• Computer equipment and software
• Domain name registration
• Office rent
• Concern insurance
• Stationery
• Accountancy costs
• Travel costs.

Only call back that the expenses have to have been solely for business organisation and not personal use – we've written a jargon-free guide to help you figure out exactly what you can merits and how. Y'all'll also demand your receipts and proof of buy also, equally you would for any company trading expense. Bear in heed that whatever training costs incurred prior to incorporation aren't allowable, nor are preliminary activities such every bit writing a concern plan or negotiating contracts.

There is one final scrap of good news. You lot can claim any expenses incurred within seven years of forming your visitor. Make sure you continue every receipt or invoice and become it filed when running a business concern – they'll ever come in handy.

Who tin view my company information?

This is a common question when incorporating a express company, and the curt answer is: anyone. In one case a visitor is formed Companies House make your visitor information bachelor to anyone via their website.

Anyone can use the Companies Firm Annals, and as long as you know a firm's company proper noun (not their trading name) or company number, y'all can look them up and request information.

What information is available? A prospective nosey parker will be able to run into past accounts, almanac returns, besides as details of visitor directors, company officers, allotment of shares, and details of Persons of Pregnant Control.

You may desire to consider using the address of your accountant, formation agent, or a registered part service for your official Registered Office to give yourself more privacy, Crisis can offer this service. Nosotros can also offer a Service Address facility though our partners Hoxton Mix.

Become an accountant

Well, we would say this, wouldn't we! Getting an auditor is a great way to keep on top of your finances. They'll remind you of important taxation dates and payments due, show y'all ways of keeping your accounts in excellent shape, advise you on allowable expenses and how to report them then you're as tax efficient every bit possible.

They can help you with things like estimating how much taxation and NI you lot'll need to pay every six months or quarterly for VAT. They'll likewise assist to ensure you're non forgetting a payment on account, which catches many people out every twelvemonth.

Notice out more than Crunch's accounting for limited companies service.

‍

Source: https://www.crunch.co.uk/knowledge-limited-company/setting-up-a-limited-company

Share this post