Most individuals entering a business would probably be under the impression that setting up a Limited Company in the UK is expensive and complicated. Far from it, to actually get your “Certificate of Incorporation” as a Limited Company does not involve high costs. And depending on the option you choose, it can be either a one day affair or it could take ten days. As far as total costs are concerned, depending on the option you choose, you may have to spend as little as £12 or it can go up to £150 + VAT if the services of a professional are used. Here is what you need to know more about company formation.
Requirements to setup limited company
To setup a limited company, you need to fulfill certain requirements. You need a company name that is unique/available, you need an UK address for the company, you need a director for the company, you need one shareholder, you will need to select an SIC Code (Standard Industrial Classification of Economic Activities) depending on the activity of the business and finally the agreement among stakeholders known as the ‘memorandum and articles of association’.
Different options available to form LTD Company
Company formation can be concluded through one of many options, listed below:
- Directly registering online with the Companies House
- Directly registering by post
- Registering through an accountant
- Registering through a company formation agent
- Registering using third party software online
Actual costs involved to setup limited company
There are actual costs, and there are additional markup costs. If you wish to register electronically yourself, the costs involved are £12. If you wish to register yourself by post, the costs involved are £40. If you desire same day registration through post, by doing it yourself, the costs are £100.
If you use either a formation agent, an accountant or third party software, there will be additional costs involved. Here, it is important to note that a company may need the services of an accountant for routine operations, and getting an accountant onboard at the earliest will certainly help in establishing a stronger working relationship.
Timelines involved to form LTD company
Online registrations take one day for the process to complete, while postal registrations take anywhere between eight to ten days for the registration process. In the case of same day postal registration, the process concludes on the same day. These timelines are on the assumption that everything is in order.
It means that your documentation, your Form IN01 – a collective of various forms, should be in order. If the documentation or the information in the forms are incomplete or incorrect, then delays would stretch the process. This can take long, depending on the nature of the observations.
If you choose to use any of the other options, for instance an accountant, a formation agent or third party software, the timelines are the same, with the advantage of getting the registration process completed smoothly.
Company will also need:
- Bank Account
- HMRC registrations like VAT and PAYE Registration
Advantages of using an accountant
Regardless of how you choose to get your company registered, you will need to register for Corporation Tax within three months of commencing business. This will certainly involve the use of an accountant at some stage. Having an accountant right from the registration stage, helps you to develop a strong relationship that will foster smoother functioning and quicker turnaround for all your future requirements. Even if you are non-uk resident, you can also setup limited company in the UK.
As your company grows and expands, your accountant will have complete knowledge, which will help the accounting service to help you avail all legitimate exemptions and ensure that your tax liabilities and exposure is kept low, legally. The single biggest advantage of having an accountant complete the process of registration on your behalf, is the fact that your first step towards setting up a limited company will not falter.
There will be qualified and experienced scrutiny of the documents and requirements by the accountant, which means that your registration process will be smooth and free from all hassles.