How to set up a new limited company

We know that setting up your own company can be both nerve-wracking and exciting. There’s certainly a lot to think about regarding the services you wish to offer and the type of clients you hope to work for, let alone the admin and tax side of things.

Because we specialise in small business accountancy, we can take care of the paperwork and admin associated with company formation, allowing you to concentrate on finding clients and generating an income from day one. We will guide you through the process from start to finish, ensuring your company is properly set up and ready for action. Most importantly, we’ll look after all your compliance issues and ensure you’re able to operate in the most tax-efficient manner.

Here’s an outline of what’s involved.

Choosing your company’s name

Your company name must be unique to your business. If your preferred name is already in use, you will need to think of something new or consider adding a unique permutation. Perhaps you could refer to the industry you are in, or add words such as ‘consultancy’ or ‘solutions’ to make your name different. We will check what names are available to use and then complete the registration with Companies House once you’ve chosen your preferred option.

Because we specialise in small business accountancy, we can take care of the paperwork and admin associated with company formation, allowing you to concentrate on finding clients and generating an income from day one. We will guide you through the process from start to finish.

Choose a registered address

You must have a registered office address for your limited company. This can be your home address if you are not using formal business premises . If you wish to keep your home address from public view, you can opt to use our address as your company registered office address.

Appoint directors and shareholders

Your limited company must have at least one director and one shareholder. This may seem odd if it’s just you in the company, but don’t worry, you can hold both positions if it’s just you in the company.

As a director of a limited company you will also fall under the Self-Assessment tax system if you draw out dividends or earn other income over and above your declared wages.  (The 2020 Business Taxes Guide)

Obtain a Standard Industry Code

The government assigns codes to limited companies according to which industry they operate in. It will be important to select the right SIC code before you undertake the registration process.

Register your company with HMRC

This is a relatively straight-forward process which involves the completion and submission of what is known as a CT41G document. This provides HMRC with some basic information about your company and must be submitted within three months of company formation.

Register for self-assessment tax

As a company director it’s highly likely that you will need to submit a self-assessment tax return by January 31st each year. We will need to register you for self-assessment and then ensure the correct submission is made by the deadline. If you’ve never completed a tax return, don’t worry, we’ll guide you through it.

Learn how to prepare your Self-Assessment Tax Return in our Self-Assessment guide.

Register for VAT

We will advise you whether the company should be registered for VAT from the outset. While VAT registration is voluntary until the income of the company exceeds £85,000 in the last 12 months, in some circumstances it may make sense to register early. For example, registering under the Flat Rate VAT Scheme can be a benefit in the first year of trading.

We’ll talk you through your different options, the best approach will depend on the industry you work in.

Learn what are the differences between the VAT and the Flat Rate VAT Scheme.

Open a business bank account

You will need to open a business bank account so that you can keep your business and personal finances separate. Many banks offer free business banking for the first year, so it’s worth shopping around. Banks will usually require your limited company registration number before you can open an account.

Set up your online bookkeeping system

When you work with us, you will have access to our sophisticated online book-keeping software which enables you to input expenses, prepare invoices and track payments as well as a host of other accounting functions. All you have to do is register via our website and then you can access all your accounting records 24/7 wherever you are. We’ll show you how.

Let us help you set up your new company

As online accountants for small businesses, we love the company formation stage and enjoy being part of the initial process. Our job is to make the administrative side of things easier for you and to ensure you comply with the requirements of HMRC and Companies House.

Find out about our cost-effective small business accountancy packages for start-ups or get in touch to find out more.

Posted by Editorial