Setting Up A Limited Company

Starting a business in the UK is both exciting and a potentially lucrative challenge to pursue. You will need a lot of dedication and commitment and it will definitely mean cutting back on some, and if not most of your free time.

If you would like to know how to set up a business in the UK, the first thing to look at will be your attitude and skill set. Do you have the knowledge in your chosen business field to pursue and succeed. You will need to have the fine qualities required to start a business.

Commitment, drive, perseverance and support from family and friends will go a long way towards transforming your business idea into reality and will be especially important during the early days.

This guide will help you decide whether you have what it takes to set up a new business. It also provides a look at the day-to-day reality of starting a business and outlines the skills and qualities that you will need.

You must register with the companies house which is the UK body for limited companies, and file your returns with them. This requires a small annual fee. Apart from that there are no costs other than if you require the help of a company formations specialist to help you with setting up the company. Every tax year you should inform the HMRC of your income and profit and expenses. All employees must pay tax and N.I.

Companies house deal with all UK business registrations and before a company becomes LTD by law, it will be registered on the companies house, which also holds all the data for LTD companies. Most business ownsers pay a company formations specialist to help them with the formation of their company.

The documents that need to be signed and returned to the companies house are the memorandum of association, articles of association and the IN01 form which lists all the details of the main directors in the company. The Memorandum of association lists your company name and details and the business location and what the nature of business is. The Articles of association outlines who owns what in your business including details on shareholders.

The Cost! How Much To Set Up A Limited Company

Costs vary from company to company but expect to pay around £50 for your company formation.

How do you set up a limited company?

If you are looking to learn how to set up a limited company you should first of all consider if you want to be a sole trader. Sole trader status is good if you run the business on your own… hence ‘sole’ trader. That being said, if your business involves other people then you should set up as a limited company. It is hard knowing exactly what to do, this is why we are letting you know how to set up a limited company.

A lot of businesses set up as a limited company, in fact most do. The term comes from the fact that the companies finances are separate from that of the shareholders or owners, and this is the big difference between choosing whether to be sole trader or a limited company. If you can image some longevity in your business and envision and you will have employees then you might want to think about limited.

The shareholder or owners in a limited company is not held responsible for company debts, and this keeps the owners protected. The owners and / or directors may be required to take out loans on behalf of the company though and this is something to look into when considering your options.

How To Set Up A Limited Company?

1. Find a company formations specialist or learn how to fill the following forms out yourself.

2. Fill out the three required forms: Memorandum Of Association – Articles Of Association – IN01

3. File your tax returns with Companies house yearly and fill out corporation tax form.

Are you setting up a private ltd company or public limited company? These are also things to consider. Please get in touch if you have any more questions