Setting up a limited company, comes with many benefits. It gives you the opportunity to create and define your brand, be the owner of everything you do – and you can also bid for work that you perhaps wouldn’t be able to as a sole trader. If you are thinking of starting up your own limited company, follow our simple steps below:
Choose the Type of Limited Company you are Setting up
There are 2 different types of limited companies that you can select from which are: private limited companies (LTD’s) and public limited companies (PLC’s). Most freelancers, small to medium businesses and start-ups will choose the LTD approach. PLC’s are intended for larger corporations and need to have a minimum share capital of £50,000 and 2 shareholders. They also need to have a company secretary and 2 directors
Start the Setting up Process
People tend to get a little nervous when it comes to this part, but it’s actually pretty simple. You can do this online, and it literally will take you around 10 minutes. In terms of costs, they are minimal. If it is done online, it will cost you £13 on Companies House. All you need to submit is some basic personal details, list yourself as a Director and then you are good to go. They normally process this in just a few hours.
Complete the Incorporation
Once you have got the ball rolling with Companies House, you need to complete the incorporation process by completing certain documents. You can do this by yourself – but a lot of people ask their accountant for advice. The documents required are:
- Memorandum of Association (name, location and nature of business)
- Form 10 (names and addresses of directors and company address)
- Form 12 (a statement that you will comply with the t&cs of the Companies Act)
- Articles of Association (this will confirm power of directors, and rights of shareholders)
Ensure Legal Requirements are Finalised
With power, comes responsibility – and there are certain legal requirements that you must take care of as a business owner. You need to make sure you are registered at Companies House, make sure your annual accounts and returns are filed every year on time, ensure that HMRC receive abbreviated accounts each year – and make sure your Corporation Tax Return is completed and is settled 9 months and a day before the year end each year.
If you follow these simple steps, you are well on your way to setting up your limited company.