You’ve made the decision to go down the contracting route, handed in your notice and made the decision that a limited company is the right option for you. What do you do now?
The next step is to register a company and start setting up your business so that, in the event a contract requires you short notice, you’re ready to go!
What is needed to form a Limited Company?
To start the process of setting up a limited company, the first question is whether you should take the ‘DIY’ approach or, for a small fee, engage an accountant to take the hassle out of the process.
There are certain minimum requirements that must be adhered to in order to register a new limited company. Here are some of the more important issues to consider:
- Company Name – This needs to be unique and not similar to any other company name on the Companies House register. There are various places that you can check to see if the name is available, such as Companies House own name checker.
- Registered Office Address – This refers to the public address shown at Companies House but does not need to be the trading address. For example, some accountants, like us, will offer you their own address to provide to Companies House. This keeps your personal address hidden from the public record.
- Directors – A limited company requires at least one director at all times. You will also need to provide an address for the director but this could be the same as the registered office address above.
- Company Secretary – You don’t need a company secretary for a private limited company. However, some companies still use them to take on some of the director’s responsibilities.
- Shareholder/Persons of Significant Control (PSC) – A limited company will typically be controlled and owned by their shareholders. Their names will appear on the incorporation documents and will have to be declared if they are a PSC. A PSC is determined by how much of the company they own. For example, a sole shareholder would be a sole PSC, whereas with two shareholders, split 75-25 of 100 shares, the shareholder with 75% will be the PSC.
- Memorandum of Association – You will also need to file a Memorandum of Association with Companies House. This is a document that tells everyone why you’ve set up the company, and how you plan to run it. This document can have significant legal importance in tax disputes and any legal proceedings. As this document can be quite important, you may wish to take professional advice.
Once the company has been incorporated with Companies House, the next steps will be deciding whether you need to be set up for any additional taxes, such as VAT or PAYE.
At Clever Accounts, we offer an all-inclusive company registration service to take the hassle out of this process. If you would like further information, why not contact us.