How to Set Up a Limited Company

Ltd company

Aside from the sole trader route, the limited liability company is the most popular business structure in the UK.

With a limited company, the liability of company directors is ‘limited’ in that the company’s finances are separate from the personal finances of the business owner. This is not the case for those who run their business as a sole trader (self employed).

Limited company shareholders are not responsible for any debts run up by the business, although banks may ask company directors to provide loan guarantees for commercial loans or credit taken out in the company’s name. (more…)

A Shareholders’ Agreement – Why you should get one if you are setting up a company with others

business partners signging shareholders agreemenr

When you start a business with someone else, it’s always a good idea to lay down some rules on important issues, such as; how you will run the company, your respective responsibilities and what happens if someone wants to leave the business. Agreeing on how you will handle these, and other important matters, will save a lot of anguish down the line.

If you are going into business with other individuals working under a partnership structure, you should do this with a Partnership Agreement. If you are setting up a limited company, you will a need to record these in a Shareholder’s Agreement.

This guide explains what a Shareholder’s Agreement does, who should get one and what should be included in the document.
(more…)

Tax efficient ways to pay yourself through a limited company

Paying yourself tax efficiently through a limited company

There are a variety of reasons why businesses or consultants may choose to operate via a limited company.

For some, the protection limited liability offers if things go wrong is an attraction, for others, the potential tax benefits are the main reason why they choose to be a limited company over a sole trader.

To explain more about the tax advantages of a limited company, we asked Manchester based accountants Alexander & Co to outline the tax-effective ways you can pay yourself if you own a limited company. (more…)

Rules you must follow when naming your limited company

If you are setting up a limited company, you should think carefully when choosing your company name. Alongside the business reasons for choosing an appropriate name, there are also a number of company naming rules you should be aware of.

If you breach certain naming rules, Companies House will simply reject your company formation application.
(more…)

Statutory entitlements for company directors – What can directors claim when insolvency strikes?

When a company goes into liquidation, it’s generally understood that employees are entitled to redundancy pay. But what about the company directors themselves? Ultimately it is their business that has failed, and their livelihood that has collapsed.

Unbeknown to many directors, the government does provide limited company directors with statutory entitlements, such as redundancy pay, in a number of situations where a limited company has become insolvent and entered liquidation.

With some 80,000 personal insolvencies a year and around 14,000 companies becoming insolvent annually, it’s an issue that many business owners can find themselves facing, but a lack of understanding about statutory entitlements means many limited company directors end up missing out.

We’ve therefore asked Gary Addison, an experienced insolvency and redundancy expert, to explain more about what statutory entitlements actually are, and how they apply to company directors. (more…)

Responsibilities & Duties of a Limited Company Director

If you have set up in business via a limited company, there are a number of duties you will have – as well as legal and financial responsibilities – if you are a director of the company.

This article provides an overview of what to expect as a limited company director.
(more…)

Persons with Significant Control (PSC): What are they and how do you create a PSC register for your business?

Since 6th April 2016, nearly all UK companies have been required to maintain a register of Persons with Significant Control (also known as a “PSC register”).

The PSC register obligations were introduced as part of the Small Business Enterprise and Employment Act 2015. The government’s intention was to enhance corporate transparency where complicated ownership structures can sometimes make it difficult to tell who owns and controls companies.

However, even small limited companies with very simple structures are required to maintain a PSC register. And, from 30th June 2016, companies need to file this information with Companies House as part of the new Confirmation Statement (which replaces the Annual Return from this date).

This guide explains to small business owners what a Person with Significant Control is, how to produce a PSC register and what companies need to do to stay on the right side of the law.

(more…)

The Confirmation Statement: What is it, and how do I file it with Companies House?

All UK limited companies, large and small, have been required to file an Annual Return (AR01) with Companies House at a set point each year.

From 30th June 2016, as part of the Small Business Enterprise and Employment Act 2015, the Annual Return is replaced with a new document called a ‘Confirmation Statement’.

Like its predecessor the Annual Return, the Confirmation Statement is a snapshot of information about a company which must be provided once per year. Most of the information provided is placed on the public record by Companies House.

Here’s everything that limited company directors need to know about the new Confirmation Statement; (more…)

Company formation – what forms do you need to fill in?

If you are considering setting up your own limited company, the prospect of ‘dealing with the authorities’ may seem daunting. In reality, the company formation process is very simple – whether you apply yourself, or use a registration agent to set up the company on your behalf.
(more…)

What is a Memorandum of Association?

The Memorandum of Association is one of the three documents you need to complete when registering a new limited company. The other two items you need to submit are Form IN01 and the Articles of Association.
(more…)

Can directors be personally liable for a company’s debts?

One of the great advantages of trading through a company is to take advantage of ‘limited liability’. This means that, unless you have personally guaranteed a liability – for example to a bank or landlord – then as a director you are not responsible for the company’s debts if it goes bust.
(more…)

The different ways to set up a company

If you want to set up a company, you can form it yourself via Companies House, use a formations agent, or an accountant will typically be more than happy to take care of the incorporation process on your behalf.
(more…)

What is an Annual Return form used for?

Each year, all UK registered companies are required by law to complete and submit an Annual Return to Companies House. This form provides a snapshot of relevant company information at the time of submission.
(more…)

What can I name my limited company?

As long as you comply with the relevant rules you can call your company whatever you like, provided that no one else is using the name already. However there are some restrictions that you need to comply with.
(more…)

Why are board minutes so important?

Board minutes are a vital part of a successful business. They ensure directors are upholding their duties and act as a reminder for decisions made during board meetings.

As well as this, they can be important to provide information to directors who were unable to attend the meeting, new directors and, if need be, aid in cases of litigation.
(more…)

What do I need to know about a Preference Share Issue?

A limited company can have many classes of shares. These can be ordinary shares, preference shares and redeemable shares. The articles of association usually set out the rights of these shares while allowing the directors to issue shares with such rights and restrictions as determined by ordinary resolution.
(more…)

What do I need to consider if I bring in another shareholder?

Many businesses start out as owner managed operations with one person owning all of the shares as well as being the managing director. However, as businesses grow, they often want to bring in other people as shareholders; maybe in return for an investment or possibly to a manager that they want to incentivise.
(more…)

Companies Act 2006 – Key points for small businesses

The Companies Act 2006 enacted a wide range of reforms to the way company law is governed. It set out the duties of company directors for the first time, and has simplified some elements of company incorporation process. In this summary, we look at the key elements of the Act from a company director’s point of view.
(more…)

What is Companies House?

When setting up and running a company, you will have regular involvement with Companies House. In this article, we look at the main functions of Companies House and what obligations limited companies have.
(more…)

What limited companies need to send to Companies House

When setting up or running a UK company, the company directors and/or the company secretary (if appointed) are responsible for sending information to Companies House to ensure that the Registry is up-to-date. This may include changes in company details, or the submission of accounts.
(more…)