Setting up a limited company in the UK to get paid for your work is the most tax-effective way. With this company setup, you define your brand your identity and each and everything you own. If you are not quite sure how to establish a limited company in the UK from scratch, this guide is best for you, so follow these steps.
Table of Contents
Type of Limited Company
You should understand and do research before making a company that which type of limited company you like to establish. There are two main types of companies:
- Public limited company
- Private limited company
We advise that most of the entrepreneurs, freelancers, or contract workers love to establish Private limited company PLC which must have a minimum share of 50 thousand pounds with two directors or shareholders and a secretary.
Best Name for Your Company
This part is tricky, confusing, and needs so much brainstorming that it leads to little tension that what name should be given. Your company name must be unique, just like a web page over the internet. If you prefer to establish a limited company, you should check the available name over the name checker section of the company registration website in the UK in order to find the unique and available name. More than 1600 companies register every day; availability of your chosen name could have low chances.
Establishing a Limited Company
If you think the previous step was crucial, this step is more bureaucratic yet tricky. Well, it is very simple if you take any forming company service, which helps you make it done in 20 minutes. All you need is to provide some documents which are necessary. Companies House is the institution that forms companies in the UK. They need to know that you are the director, they open your company in a few hours.
Incorporation Process
The Companies House is responsible for establishing limited companies in the UK. They have all the information required to fulfill their requirement on the website. Many times an agent can get your register but to complete the incorporation process, these documents are required:
- Memorandum of Association
Type, name, and location of Company
- Form 10
Address of limited company, name of director and address
- Form 12
This form states that your limited company compliance with the Companies Act
- Article of Association
This document outlines the rights of shareholders and the power of directors over the company and many other requirements and duties of the people holding the company together.
These are a few documents you need to provide to the Companies House, so they check each and everything and give it a go.
Cost of Setting Up A Limited Company
Many companies forming services offer lower than 20 pounds to register your company with them, so they also offer you insurance and bank account in any renowned bank in the UK. If you visit their website, they will guide you on each and every step. In their blog section, you will find articles that clearly define what should be the roles of director, how much a shareholder has its share in the company, etc. Therefore, you must know that your limited company must be:
- Must be registered with Companies House
- Accounts information should be filed each year and provide to Companies House
- HMRC must have your account every year
- An Annual Tax of Corporation should file in 9 months of period
In Case of Rejection
If you find any error in documents, you have provided or filled something wrong by mistake. This leads to rejection by the Companies House. So be careful when filling out the documents. In this way, you stay out of trouble of getting rejected. It has been seen that Companies Houses clear the errors in few minutes and establish the company in a few hours a day.
Sensitive Words
If Companies house found any sensitive word in your company`s name, they definitely reject it. Your company name must approve by the Companies Houses. Article of Association is the document where this issue can arise. If you email or post your documents with correction, they correct it in a few days, but if you hire any agent for this service. This is very helpful as it solves your problem in a few hours.
Informing HMRC Companies House is informed by the HMRC when a new limited company is established. You get a letter from HMRC at the given address of your office. This letter contains your date of starting trading or business. This letter also covers the unique taxpayer number too. They label your company as Active, so you pay your corporation tax also. It is very good if you tell HMRC three months early before starting your business about your limited company. They will update your record as soon as possible and ready the documents of the corporation tax and tax return file. You should also tell HMRC in case your company is dormant.
If you are looking to setup your company in UK, then Mint Accountax Ltd available to help in this matter. So contact them now and get better solution.