How to set up or start a Limited Company
- Posted by: AKKS Team
- Category: Blog
Setting up a limited company is one of the smartest and most tax-efficient ways to get paid for your work or business.
With a limited company set up, you get to define your brand, own everything you do, run your business in the most tax-efficient way, and at the same time pitch for the work you wouldn’t be able to get as a sole trader.
Are you ready to learn how to set up a limited company?
How to set up or start a Limited Company in four simple steps
Step 1: Choose which type of Limited Company to set up
Once you’ve decided to set up a limited company, you have to choose which type you wish to form. The two main choices are:
- Private Limited Companies (LTDs)
- Public Limited Companies (PLCs)
Most freelancers, contractors, start-ups and small businesses will opt for a Private Limited Company, as PLCs must have a minimum share capital of £50,000, at least two shareholders, two directors and a qualified company secretary.
Step 2: Pick your name
This bit is equal parts the most fun and most frustrating part of the whole process for most new limited companies. Much like a web address, your company name has to be completely unique. You can differentiate in a few ways to guarantee a unique name – for example, a limited company name can use either “Limited” or “Ltd.” (i.e. “AKKS Limited” or “AKKS Ltd.”), You can find available company names using Companies House company name checker, but with over 1,500 companies formed every day, the availability of your preferred name could be limited.
Step 3: Forming or Registering a Limited Company
If step two was the fun and frustrating part, this one’s the tricky and bureaucratic part – or at least it’s seen to be. It’s actually really simple if you’re organised though. With AKKS company formation comprehensive service you can’t go wrong, and all for the cost of just £95 +VAT which is one of the most competitive (all inclusive) package available in London.
You just have to supply certain personal details to help Companies House identify you as a company director, and you’re good to go. Companies House will often have your limited company formed in a few hours.
Step 4: Complete the incorporation process
Companies House is responsible for all limited company registration in the UK. Their website provides detailed information. The following documents must be completed and returned to Companies House in order to complete the incorporation process. Often, your company formation agent or accountant will complete these on your behalf:
- Memorandum of Association – limited company name, location, business type
- Form 10 – director’s names, addresses and registered limited company address (this doesn’t have to be where you work from but will be where the legal correspondence from HMRC and Companies House is sent)
- Form 12 – states the limited company complies with the terms and conditions of the Companies Act
- Articles of Association – outlines director’s powers, shareholder rights etc. (this is often provided by the formations company that sets up the limited company).
And that’s how to become a limited company! What do you need to do next?
Well, there are a couple more bits of admin you should take care of and there are those pesky reporting and filing responsibilities you need to stay on top of.
Simple admin first, you’ll need a business bank account for your limited company and AKKS small business specialist accountants in London will guide you to what to look for in a good business bank account and possibly recommend you to our contacts.
You’ll also need some small business insurance to cover you and your business for any work you’re doing.
How much does it cost to set up a Limited Company?
AKKS company formation all-inclusive comprehensive package cost just £95.00 +VAT, which is one of the most competitive (all inclusive) package available in London and you will get one month of free accounting with AKKS or registering yourself online with companies house would cost £12.
We’ve helped set up hundreds of limited companies. Get your limited company set up in just a few minutes.
Get an accountant
Well, we would say this, Getting small business accountant is a great way to keep on top of your finances. They’ll remind you of important tax dates and payments due, show you ways of keeping your accounts in excellent shape, and advise you on allowable expenses and how to report them so you’re as tax efficient as possible.
They can help you with things like estimating how much tax and NI you’ll need to pay every six months or quarterly for VAT. They’ll also help to ensure you’re not forgetting a payment on account, which catches many people out every year.
Find out more about AKKS accounting services