Thursday, 28 March 2013

How to set up a Limited Company


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Following on from yesterday's blog on Why you Should Set up a Limited Company. Today our guest blogger Ed O'Neill from English In Newcastle explains how to set up a limited company. 

Your company doesn’t need to be in a shiny
skyscraper for it to be a Limited company.

Ed’s step-by-step guide to incorporation

·         There are many ‘formation agencies’ out there (google: ‘setting up a Ltd Company') who can charge anything from tens to hundreds of pounds to get your company set up. 99% of people who want to set up a company don’t need to use these, it is so easy to set it all up yourself, and it only costs 15 quid.



2. Click ‘Companies House Web Incorporation Service

3. Register for the service using your email if you haven’t already

4. Follow the steps, you will need:

-  Company Name and Address

-  Details of all Directors (in my case it was only me but you can have more, you can also have a Secretary, optional)

- 3 pieces of personal information (eye colour, mother’s maiden name, place of birth etc.)

- Details of any shareholders, normally the only shareholders are the Directors, or just you if you are 1 person.

-  Details about shares – For most people it will be a company limited by shares and each Director will have 1 share.

-  Adopt articles of association – You can just choose to adopt ‘standard’ articles by clicking ‘adopt standard articles’, unless you have some unusual share arrangements i.e. your Grandma has shares in the company but she can’t vote in the AGM etc. It’s unlikely this will happen!

-  A way to pay 15 pounds (credit/debit card or paypal)

-  Follow the steps on the website and if you have all the information I’ve listed it’ll be a breeze

What Responsibilities do You have as a Company Director?

Dormant:

  If You are a Dormant (not trading) Company. You have responsibilities if you trade or not, if you don’t make any sales or work on the company at all you still have to do some of these things. If you are a ‘dormant’ company, not trading, Companies House has more help on what your responsibilities are in their    
 Dormant Company Page (Scroll Down to Chapter 8).


 Trading:
 
If You are not a Dormant Company (A Going Concern) You have to do an Annual Return each year – Just a few questions about your business, it takes about 10 minutes, it’s all online and only once a year.

·         You have to file what are called Abbreviated Accounts, showing the financial position of your company. Personally I use an accountant to create and file all these things online. If you really want to spend the time you can do them yourself but you have got to love the numbers and you also have to put them in a format required by Companies House. My accountant costs around 600 pounds a year to file all these, as well as filing everything with the tax office (HMRC) (also one of your responsibilities) and it saves a huge headache and any mistakes. 

I strongly recommend having an accountant, not just if you have a Limited Company but also if you are self-employed, so your affairs are all in order

·         All Login information needs to be provided to the accountant so they can file things on your behalf, that all happens 18 months later though. For the start, just enjoy the feeling of ‘Having Your own Company’ and being a true ‘Company Director’.

You may also find these blogs helpful What is the market for your dream? Writing Online to Aid your Business and Why Should I Bother to Save

By Ed O'Neill


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