Setting up and Registering your own limited company in the UK is very simple and cost-effective. Having your own limited company can save you from many tight spots and it’s the smartest way to get paid for work.
Company formation process is lasting till the period of one year. Under this phase of 12 months, companies get to know about all the things that are required for company operations. It might be easy to get the online formation of your company but if you rush to do that, and that too without proper research then it can become a big trouble for you.
Generally, business owners work as sole traders, start-ups, Umbrella Company or limited companies. If you settle on company formation, then here’s something you need to know about.
4 Steps to Setting up a Limited Company in the UK
1. Selecting the type of limited company
Business owners have an option to select from either of the following types
- Public Limited Companies(PLCs)
- Private Limited Companies(LTDs)
To form a PLC there should be share capital of minimum £50,000, two directors, two shareholders and eligible company secretary. Generally, LTDs are formed by contractors, freelancers, small businesses and start-ups.
2. Form your Limited Company
Forming a limited company may be considered as a complex and technical process, but in reality, it is very effortless. You can form a company online in no time. You just have to provide precise details to Companies House about company’s directors and identification. You will have your own limited company formed in just a few hours.
3. Incorporation process
Incorporating your company with the Companies House is like the legal inception of your company in the UK. In order to complete the incorporation process of the company, you have to fill the following documents and submit them to Companies House.
- Form 10 – consisting of directors’ name, address and registered office address of the company.
- Form12- documents that explain that the limited company is formulated under terms and conditions of the Companies Act.
- MOA- Memorandum of Association is an essential document of the company which shows all the major information on the company, business works, directors, etc
- AOA- Article of Association- it’s a document specially compiled for outsiders consisting of information about Director’s power, rights of stakeholders, rule, and regulation of the company, etc.
Compile all these documents before you step towards Companies House and once your company is registered, you will receive “Incorporation Certificate”. This certificate proves that your company legally exists in the UK.
4. After incorporation
Here your company is successfully incorporated but the year is still not completed. There are still many legal things that should be taken care of.
Having an accountant or outsourcing accounting activities is a necessary part of the first year as this will help you to keep financial records of the company and you will have smooth annual returns at the end of your company’s first fiscal year.
You would be required to fill the forms send by Inland Revenues and return them confirming all the company’s details. Keep your financial record up-to-date that the HMRC at the end of the year would become easy for your company.
Hence, at the end of the first year, your accountants have to complete the annual returns and required to submit it on time For HMRC and file a copy at Companies House.