How to Setup a Limited Company? Lets Have a Look

  • 1 year ago

You can quickly get paid on your work if you set up a limited company. You need to define your brand and show what you own in your business. This is the most tax-efficient way to pitch for your work. If you are not sure how to do it, we guide you through the rest of this article. Here is what you need to know:

What Type of Limited Company you Need

When you finalize what kind of company you need to set up as a limited company, you should define what type you form. There are two main types:

  • Public limited company
  • Private limited company

Most of the contractors, startups, and new small businesses go for Private limited companies because they have to share minimum capital of £51,000, two shareholders, two directors and a sectary for the company which must be qualified.

A Decent Name

This bit is a fun part and the most fun part of the whole process for new limited companies. Like your web address, your company name must be unique. You can find differentials to guarantee a unique name - for example, a limited company name is "Limited" or "Ltd." can use them (for example, "Park View" or "Park View Ltd"). You can find existing company names on websites to find the best company name, but more than 1,500 companies can be created daily, and the disposal of your preferred name is limited.

Making of a Limited Company

If the second stage is fun and annoying, then this is another challenging part - of it seems to be. If you're organized, it's pretty simple. With many online services, you can make a limited partnership company in just a few minutes.

It is enough for you to provide your personal information to help the company house recognize you as a company director, and you good to go for your company. In a few hours, the company house will have your limited partnerships up and running.

Completion of Corporation Process

The Companies House is liable for registering every limited company in the UK. More information is available on their website. To complete the registration, you must complete the following documents and give them back to the Companies house. Many times your agent or accountant complete these steps for you:

  • Memorandum of Association – it has the name of company location and type of business
  • Form 10- this form has the name address of the director and address of the limited company.
  • Form 12 – This form has all the terms and condition any limited company have under the Companies Act
  • Article of Association – this document outline the power of the director, rights of shareholders.

This is how you become a Limited Company. What else you Need to know?

There are things you need to know and take care of when starting a limited company. Those are all filing and reporting responsibilities that you need to handle by yourself in the first place.  You also need a business bank account for your limited company. It would help if you also had business insurance for small business, so you and your business covers what you are doing.

What is the Cost of Starting a Limited Company?

The cost of registering a limited company is just £12, and it's often completely free when you hire any company to provide you this service. When you take small business insurance, many service providers return your £12. Many banks also offer this refund when you open your company bank account with them.

Responsibilities and Duties as a Director of a Limited Company

Many detailed articles guide you with your responsibilities and duties as director of a limited company and what you need to file within the given deadline. There are specific duties when you are working as a director of a limited company. This includes:

  • Your new company must register with Companies House
  • Every year, your confirmation statement and annual accounts must be filed.
  • Every year, HMRC must have your accounts
  • Within the nine-month of the period, the annual corporation tax return should be done, and any tax you owned must be paid before the deadline.
  • Personal tax return and registration for self-assessment to HMRC should be done every year (it is not essential when you are running a non-profit organization like a charity)
  • It would be best if you abode by the rules mentioned in the article of association
  • Keep reports and record changes updated

Tell other shareholders if you like to get benefits from any transaction made in the company

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