Starting a limited company can be a great option for a small business owner, as well as for freelancers or contractors. Aspiring entrepreneurs who are looking to get started need relevant information and guidance. At Angels Den Funding, we are always looking for the best businesses out there and have partnered with other professionals to meet the needs of startups.
If you are considering setting up a Limited Company in the UK, take the following steps into consideration:
1. Verify if setting up a Limited Company is the right solution for you
The two main choices are Private Limited Companies (LTDs) and Public Limited Companies (PLCs). Most freelancers, contractors, start-ups and small business owner will opt for a Private Limited Company, since Public Limited Companies need to meet certain requirements that are not always compatible with early-stage businesses.
A private limited company can also be a company ‘limited by shares’ or ‘limited by guarantee’.
Limited by shares companies are usually businesses that make a profit. This means the company:
Limited by guarantee companies are usually ‘not for profit’. This means the company:
What sort of work you do should be the main factor that influences the way you set up your business. It can also affect the way you pay tax and get funding.
2. Select a name for your company
If you decided to set up a private limited company, the next step is to choose a name for your business. While it sounds easy, some rules apply and the process can become frustrating if you discover, for instance, that the name you had in mind is the same as another registered company’s name.
Use the Companies House register for the name availability checker. With certain exceptions, your name must usually end in either ‘Limited’ or ‘Ltd’. Your name also cannot contain a ‘sensitive’ word or expression, or suggest a connection with government or local authorities, unless you get permission. In addition to this, there are rules you must follow about displaying your company name.
3. Choose the people and prepare the documents
If you are an organised person, the bureaucratic part should not cause you any significant stress. Of course, there is always the option of requesting professional help if you consider it necessary. The responsibilities that this step involves usually include:
· Choosing directors and a company secretary
· Deciding who the shareholders or guarantors are
· Identifying people with significant control over your company
· Preparing documents agreeing on how to run the company
· Checking what records you will need to keep
4. Register your company
You can register your company:
Most companies register for Corporation Tax and PAYE as an employer at the same time as registering with Companies House. You will need to register for Corporation Tax separately if you registered your company using the other 3 methods presented above. Keep in mind that you may get a penalty if you register late.
After setting up a Limited Company, you get one step closer to achieving your business goals. This requires further efforts, but Angels Den Funding understands startups’ challenges and has forged partnerships to cater to the needs of early-stage companies. Visionary Accountants are one of our partners. Visionary’s team of dedicated tax and accountancy specialists are trained to work with SMEs not only to deliver accountancy services accurately and efficiently, but also to provide support and advice to improve business performance.
Should you be interested in their services, please get in touch with us by sending an email at partnerships@angelsden.com with your contact details.
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