Registering and running a limited company means more accounting and paperwork than a partnership or sole trader business. However, the extra protection you get from financial liabilities makes it completely worth it. The limited liability of the company is one of the main reasons for business owners to consider it.
Since a limited company is its legal entity, it can incur debts, own assets, and property, sue, and get sued. But the finances of the company are separate from the personal finances of the owners. So, even if the business fails, none of the owners will be responsible for any debts.
Thus, if you want to run a business without risking your assets or wealth, read on to know the tips to start a limited company.
1. Picking Your Registered Office Address
You will need a registered office address for limited company in UK. The director’s service address has to be put in the registration application, as well. Send the legal notices or official documents to both these addresses. The register of the Companies House also displays them publicly.
The registered office address must be in the UK. It can be a residential address, too, though it does not have to be the company’s trading address. Many limited companies go for registered office address services that lend out office space for an annual fee.
2. Understand the Legal Needs for the Limited Companies
A limited company needs to have at least one director for running the business. These company directors should do the following things:
- File annual returns with the Companies House. It is like a snapshot of your business that has the details of the registered office, directors, shareholdings, and share capitals. They ensure the records of the Company House are updated
- Submit the annual accounts of your company to the Companies House
- Submit the annual corporation tax returns to the HMRC (HM Revenue and Customs)
- Is the business turnover more than the VAT threshold? Then the company must register for VAT and the quarterly VAT returns.
- You need to follow the articles of association while operating the company.
- Follow the Regulatory Reform Order 2005 to maintain all the fire safety rules on the premises.
- Apply for Employer Liability Insurance if your office needs employees. Opt for Public Liability Insurance for the non-employee visit.
3. Get the Documents for the Company
Regardless of whether you want to use company formation agents or register it yourself, there are three primary documents. You need to submit them to the Companies House before starting to trade.
- A Memorandum of Association is the legal statement signed by all the parties forming a company. It includes the addresses and names of shareholders and directors.
- The Articles of Association is the legal document that outlines the shareholders’ rights and powers that company directors have over their business.
- Form IN01 is the document that lists out the details of the company secretary (if applicable), company directors, shares issues, shareholders, and the share capital.
4. Choosing the Right Business Name For Your Company
Make sure that your new company does not have the same name as any other registered company. Even you can’t give similar names. You can carry out a Google search on the business name you are considering. Look at the Companies House register to check if any other company has the same name. You should also look at the IPO to know if the name is already present under the UK trademark.
Specific rules exist regarding the types of names you can’t use for the business. Your registered name can’t have potentially misleading terms that suggest professional qualifications that you do not have. These include terms like Commission, Scottish, English, British, Royal, Bank, Chartered, or any other words.
5. Select the Company Officers
Your company needs to have at least a company officer. He or she holds the responsibility for the business all the time. At least one company director is enough for the private limited companies, usually, the one who started the company. Public limited companies need at least a company secretary and two directors.
- Company secretaries are responsible for ensuring all the statutory filings are complete. They maintain all the details of the board meetings, and statutory registers properly.
- Company directors are responsible for managing the companies as per the law and the articles of association. They take charge of the annual returns and annual accounts, including notices of change.
6. Choose the Way to Register Your Company
You can either register a limited company yourself or get in touch with a company formation agent. Let’s give you a fair idea of what it means to register a company yourself or with an agent’s help.
You can register the company with the Companies House. It needs about 24 hours to complete the registration. You will have to decide on the company’s name and address before you start the registration process. The address must be valid and within the UK because of the HMRC. Companies House will use it to send notices to your company.
On the other hand, do you feel that going through the entire process is too much of a hassle for you? Then hire a recognized company formation agent to do what is needed.
7. The Cost of Submitting the Documents
Submitting the application forms for the UK company setup and registering your limited company with the Companies House will cost about £20. It takes around seven to ten days. You will have to pay £50 for the same-day registration service.
Registering a company online makes the process easier than manual registration. It will take only three hours to register a company online. You will need to offer your details for letting the Companies House know that you are the company director. Also, your venture is safe and legal to get registered.
You will get a Certification of Incorporation that confirms your new limited company’s existence. It also states the date of formation and company number. Register your company with the HMRC within three months of getting registered to avoid a penalty or risk. Now that you know all the tips to start a limited company, start putting them to action for your venture.