Unless you want to become a sole trader, starting your own limited liability company is your best choice. It is currently the UK’s most popular type of busEverything You Need to Know About Starting Your Own Limited Company in the UKiness and for good reasons. It’s easy to start and maintain if you’re handling your business properly.
Unlike being self-employed, owning a limited liability company means that your company’s finances are separated from your own. Furthermore, shareholders are not responsible for the debts of the business they hold shares in. If your mind is set and you want to set up your limited company as fast as possible, 1st Formations offers complete guidance through the process. However, you can also start it on your own. Here’s everything you need to know:
Every limited liability company that is formed in the UK must be registered with the Companies House. This government agency is the regulatory body that maintains records of all the registered companies in the UK.
The registration process is straightforward. The most popular way to do it is by hiring a company formation agent. Of course, you can do this on your own, but it takes more time and effort to do so. By hiring a company formation agent you will have access to the whole registration process online, thus only taking a couple of hours of your precious time.
As usual, paperwork plays the number one role in registering a new company. In order to register your limited liability company you will need the following documents:
- Memorandum of Association – this is a document that includes the complete name and address of each individual who will take part in the formation of the company.
- Articles of Association – this document stipulates the details regarding the rights and powers of the company members, including the director and the shareholders.
- Form IN01 – a 5-part form that contains details regarding the company, its proposed officers, and the statements of capital, guarantee, and compliance.
Limited Company Types
There are two main types of limited companies that you can start: private and public. A private limited company is the most common type of company set up in the UK. Its main limitation is that while it can have shareholders, it cannot offer them to the public. Every private limited company must have at least one director. There used to be a law regarding the necessity of a secretary, but it no longer applies to private companies.
The second type, the public limited company, has more requirements. At least 2 directors and a company secretary are needed for such a company. Moreover, a public limited company can offer its shares to the public in order to raise funds.
Requirements of Limited Companies
Every limited company must adhere to the following 6 requirements:
- The company has to be registered with the Companies House
- The company needs to inform the HMRC of any profits or taxable income every year
- The company’s financial accounts have to be filed with the Companies House
- A confirmation Statement must be filed on a yearly basis to ensure that the Companies House records are up-to-date with the latest information regarding the company
- A Corporation Tax return form must be submitted every year
- Every employee must pay income tax