You’ve already decided to take the jump into starting your own business and settled on the popular private limited company format. Good choice. A limited liability company offers a relatively quick and simplistic means of getting your business up and moving.
Furthermore, with the safety knowing that your personal finances are protected in the event of heavy debt or bankruptcy, it is certainly one which offers a relatively low level of risk.
While that all sounds great, where do you actually get started? What do you need to do first? To help you through the process, we’ve put together our short step by step guide on what to expect when registering and setting up a private limited company.
One of the first and naturally most important decisions you’ll have to make as a new business owner is what to call your new company.
What is your company going to be doing? What products or services will it provide? To remain versatile and flexible for the long-term, why not choose more general name for your company.
For example, you don’t want to be known as Mike’s Windows, if you then later decide branch into something beyond windows.
Next, you will want to decide where you’re going to be based. But what if you are just starting out or working from home? Listing your home address not only means it is visible to the public, it also might put off potential customers.
One option to consider is getting a virtual office address which provides the professional image of a more established business, while allowing you to continue working from home. Many virtual office providers now even offer additional complementary services as part of their virtual office packages.
Icon Offices, for example, provide mail forwarding and document scan services for free when you sign up for one of their virtual office services packages.
Finally, deciding which key people will legally make up the company as well as their associated shares should be the next step. By choosing how ordinary shares are divided, you are also stating which key people are entitled to which proportion of company dividend pay outs.
If you have a name, address and are clear on how the company’s shareholding will be divided, you’re ready to start the formal company registration process. To get started, you will need to complete company registration forms online at Companies House.
The registration process will require you to state the company directors you wish to appoint, company secretary (if required) as well as verify whether the company name you have selected is available for use. There will also be a minimum fee to pay to complete the registration process.
While the online forms may appear self-explanatory, it is advised to seek the help from an agent or to ensure that all company details are recorded accurately.
For example, companies whose directors are non-UK residents are required to provide additional information to verify their identity, which if submitted incorrectly could cause delays in the application.
A number of agents or accountants can provide this service at relatively low costs. Icon Offices, for instance can complete UK company registration with Companies house within 1 working day and instant submission means you can apply without the need for paperwork or signatures.
In addition to registering at Companies House, all new companies will be required to file a document known as a Memorandum of Association as part of their application. In short, the Memorandum of Association outlines the formal process of setting up the company, details how the company will be run, owned, and managed as well as the responsibilities and powers of the company’s named directors.
Though it can be written in a relatively simplistic manner, it is worth consulting with an expert as the document can have great significant in the event of future disputes on tax and legal compliance.
For a fixed fee of £15, which includes the registration fee charged by Companies House, Icon Offices can have your business ready to trade and company documents processed within just one day.
Not only will you be able to receive an email copy of your Memorandum of Association, Share Certificate, Certificate of Incorporation and other company documents the day after your application, you can rest assured that they will have been processed and handled by experts.
Though you may want to go it alone, most likely you will require the services or an accountant at some point throughout the company formation process.
Even if you’ve managed this far without one, running a private limited company requires you to be knowledgeable in corporate tax legislation as well as understand the rules about how to complete your company’s annual tax filing.
Hiring the services of an accountant could also benefit you beyond the company formation stages. For example, accountants can support your business with employee payroll as well as general financial and tax planning.
A popular option nowadays is to employ the services of a virtual office provider to handle your company finances. For example, in addition to completing your company formation, Icon offices can further assist with their accountancy services packages.
Their in-house team of trained accountants can offer advice and information on taxation, file all of the regulatory returns to Companies House and HMRC as well as handle annual company accounts and VAT returns.
Moreover, with accountancy package prices amongst some of the cheapest in the UK, it could be an excellent option to keep your costs low.
The next step to getting set up will be to get a business bank account. Accountants can also be particularly useful in this regard due to their relationships with banks, especially at a time when getting a business bank account is proving more and more difficult.
Indeed, newly introduced Know Your Customer (KYC) and Anti Money Laundering checks and requirements have meant that new businesses are often turned away, especially by High Street banks.
Thanks to their relationships with banking partners across the country, Icon Offices can assist with opening a UK business bank account and do so over the phone without the need for a face to face meeting.
This is also the case even if the company directors are non-UK residents. Furthermore, you could also qualify for cash back upon getting your account depending on the banking provider you choose to open your account with.
Finally, with your business bank account set up and formal company registration documents in hand, you will want to register online for VAT at the HMRC website.
Though you are not legally required to register for VAT until your VAT taxable turnover exceeds the VAT registration threshold of £85,000 for a 12-month period, it may be beneficial to register straight away if your customers are to be predominantly VAT-registered businesses.
Guidance on how to make the calculations for VAT registration can be found on the HMRC website, however many accountants and agents may offer to handle your VAT registration for free.