There are a few options from which to choose for those setting up a business in the UK. Most common is the business structure of the sole trader. When utilizing this plan, personal finances and company finances are not kept separate. This is why limited liability companies are the next in line regarding popularity. What makes this type of company limited is because personal finances are not linked to those of the business. Plus, no responsibility is passed on to the shareholders of the business for any debts that it may encounter. Following is some information on 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.
The company’s yearly accounts must be filed at Companies House as well. Along with filing these accounts, an Annual Return, form AR01, must also be submitted complete with all of the current information about the company. This might warrant a processing fee. Tax information regarding any profits and taxable income that your business experiences on an annual basis must be reported to HMRC. On top of that, a corporation tax return must be completed, and you are granted nine months to pay on any liabilities.
The kind of limited company you will form must also be considered. A few of the most common are private companies that shares limit, private companies that guarantees limit, and public limited companies. Limited companies associated with guarantees do not have shareholders, while those that are public limited are traded on the stock market.
It is not too terribly hard to set up a limited company. Of course, the number of forms and attention you must pay to them can become tiresome, but that has more to do with registration so that you may conduct business legally. Most of the hard work is decided in the preliminary phases, such as what you want to sell, what type of limited company you will be (shares, guarantees, or public), and what kind of directorship you will utilize. After the paperwork is complete, it is time to start up the business.
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