In the United Kingdom, there are various routes one may take when setting up a business. The most prominent business structure is that of the sole trader. In this model, personal finances are not separate from the company's finances. A limited liability company is therefore another attractive option for many. This type of company is referred to as limited because personal and business finances are kept separate. Additionally, shareholders of a limited company do not take on the responsibility of any debts accrued by the business. This is how to set up a limited company.
Once you have taken care of the preliminary planning of your business and are ready to begin operations, you must be registered with the Registrar of Companies at Companies House. The proper documents must be filed by you or an agent who works on your behalf. This process can even be performed online. These documents include the Memorandum of Association, Articles of Association, and Form IN01. Respectively, these forms detail the company's name and type of business; the directors' powers and rights of the shareholders; and the details of the directors, secretary and shareholders. Occasionally, more information will be requested if particular wording shows up on your forms.
Yearly accounts concerning your business must be submitted to Companies House also. An Annual Return form, also known as AR01, must be submitted as well as your yearly account report. The AR01 provides Companies House with the up-to-date information about your company and often involves a processing fee. That is not all, as tax information in relation to profits and taxable income that your company annually produces must be brought to the attention of HMRC. To top it off, a corporation tax return must be filed, and you will have nine months to pay on the liabilities. You will also need to decide upon the type of limited company you will form. Some of the main types include private companies limited by shares, private companies limited by guarantees, and public limited companies. Those limited by guarantee do not possess shareholders, while the company must be that of public limited in order to trade on the stock market.
Setting up a limited company is really not all that difficult. The amount of forms and attention to detail on them can become tedious, but it is more about getting registered so that you are legal. Most of the work is done in the planning phases, considerations such as what your product will be, how you wish to limit your company either with shares or guarantees, and what type of director setup you desire. Once your limited company is set up, then you are ready to get down to business.
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