SETTING UP A LIMITED COMPANY

Limited Company

Everything you need to know about setting up a Limited Company

Setting up your own limited company has many benefits including:

  1. Better reputation
  2. Simpler access to finance
  3. Protection through limited liability
  4. Tax and national insurance efficiency

 

If you’re looking to reap these benefits, then we’ve got great news!

Setting up a limited company isn’t difficult at all.

All you have to do is consider a few things before submitting your application and you’re good to go.

In this post, we will guide you through the step-by-step process of how to submit your application and discuss each bit of information you need to ensure that your application can be processed correctly the first time.

In other words, we will explain everything you need to know about setting up a limited company.

Table of Contents

List of Required Information and Documents Setting Up Limited Company

You will need the following documents and bits of information to submit your application:

1). Company Name

Your company must have a unique name.

You must not add any sensitive words or phrases, and you cannot include a trademark in your name or promote yourself as something you’re not.

Follow these rules strictly. Otherwise, your company’s formation request will get rejected.

2). A Registered Address

Your company must submit an address for receiving official mails.

Most companies use their own residential address. But if you’re not comfortable with that, you can use a third-party service as long as the address location is within the country you’re applying for.

For example, if your company is being registered in England, then the registered address must also be in England. The same goes for Wales, Scotland, and Northern Ireland.

3). Company Officials

Your company must have at least one director.

A few years ago, you had to appoint at least one company secretary as well. But that’s not a requirement anymore. Now, all you need is one director, and the rest is up to you.

You have to submit personal information of all official company members including their names, addresses, nationalities, and dates of birth.

4). Share Structure

You have to create a shareholding structure for your company.

When creating a shareholding structure, you have to ask yourself what’s the best way to divide the shares of your company. Should you own all the shares? Or should you divide the shares between family and company members?

It’s best to consult an accountant for coming up with a proper structure for your company’s shares.

5). Personal Information of All Shareholders

You have to submit personal information of all shareholders in your company.

For every shareholder, you have to submit their name, address, class of share, and percentage of shares they will own. Besides this, you also have to submit 3 pieces of personal information for each shareholder.

Accepted personal information includes mother’s maiden name, father’s first name, name of birth town, eye color, and national insurance number or passport number.

6). PSC Record

Your company must keep a record of all PSC.

For those of you who don’t know, PSC stands for People of Significant Control. Members who hold more than 24% shares of your company are considered PSC.

So your company must keep a record of all PSC members.

7). Articles of Association

Your company must have a set of Articles—essentially a rule book explaining roles and powers of each member.

The articles of association must govern all aspects of running a company including powers of directors and shareholders, voting rights of members, and how dividends are distributed among members.

If you’re unable to come up with your own articles of association, then you can use this generic model.

8). Memorandum of Association

Memorandum of Association is an agreement that confirms the intention of your limited company.

It has the following wording:

“Each subscriber to this memorandum of association wishes to form a company under the Companies Act 2006 and agrees to become a member of the company and to take at least one share.”

Have no idea what a memorandum looks like? Check out the official template from Gov.uk.

9). SIC Code

You must submit at least one SIC code to identify what your company is about.

For those of you who don’t know, Standard Industry Classification (SIC) code identifies the trade of your company. For example, “62012” is for business and domestic software development, and “63110” is for data processing, hosting and related activities, and so on.

You can browse the complete list of official SIC codes here.

Most companies are required to submit only one SIC code. But every company can submit up to 4.

10). Register for Corporation Tax

Once your application gets accepted and you’re set up as a limited company, you have to register for corporation tax within three months after carrying out any form of business.

Step-by-Step Method on how to set up a Limited Company

step by step setting up ltd company

Step Number 1

Once you’ve got all the documents and information that we mentioned earlier, it’s now time to get your company registered with Companies House.

You have 3 options for submitting your application, and each of these options has a different fee.

  • Option 1: Filing an online application through dedicated software. The standard fee is £10 for this method.

  • Option 2: Web incorporation through Companies House’s online portal. The standard fee is £12 for this method.Option 3: Paper filing the IN01 form. The standard fee is £40 for this method. You have to send the IN01 form plus supporting documents to the nearby office. According to their Web site, they process these applications within 5 days.

Step Number 2

Now, you have to wait for approval of your company’s formation request from Companies House. If you have filed online, your application will be processed quickly.

But if you have gone with the offline method, your application will take longer to be processed (most likely within a week).

Step Number 3

Once your company’s formation is approved, you have to set up and maintain company books. You have to create and maintain the following registers:

  • Register of Members
  • Register of Directors
  • Register of Secretaries
  • Register of Share Transfers
  • Register of Allotments of Shares
  • Register of Mortgages & Charges
  • Register of People with Significant Control
  • Register of Directors’ Residential Addresses

Step Number 4

The next thing you need to do is produce share certificates for each shareholder of your company. Every shareholder should receive their certificates to have evidence that they’re a shareholder in your company.

Step Number 5

Now, there are a few more things left to do. Some of them are:

  • Register with HMRC
  • Set up PAYE for employees
  • Set up at least one bank account for your company
  • Register a trademark (if it’s important for your company)

But the most important step (potentially) is still missing…

You haven’t set up an official web site for your company.

Benefits of Setting Up an Official Web Site

Every company can benefit from having their own official Web site. The most prominent of these benefits are:

  • Increase sales
  • Expand your market
  • Improve your advertising
  • Showcase your products and services.
  • Have social proof to increase credibility
  • Save money on printing and distribution costs
  • Educate existing customers about your business
  • Get more visitors through Google and other search engines

 

If you’re serious about setting up your site, get in touch with us to get your work started today!

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