If you’re looking to set up a UK company, a limited liability company is a very attractive option, so much so it’s the most popular formal business structure in the UK.
Its popularity is largely due to the inherently circumscribed nature of such a company – liability is literally ‘limited’ for company directors, as the company’s finances remain separate from their personal finances. This isn’t true for sole traders (self-employed) and as such, the limited company is a very attractive prospect.
But how exactly do you go about setting one up? Here’s our quick and easy guide to setting up a UK limited company…
The regulatory body for registering all UK limited companies is Companies House. Before you can set up your business as a limited liability company, you must first register it with Companies House. This is relatively simple: either do it yourself or have your accountant complete the application for you.
You will need:
• Memorandum of Association – this document includes personal details (name and address) of subscribers forming the limited company.
• Articles of Association – this outlines the directors’ powers and the rights of any shareholders.
• Form IN01 – this contains information about director(s), shareholders, company secretary (optional), and the share capital (if the company is limited by shares).
Companies House has detailed guidance on their website as well as FAQs describing every aspect of registration. This includes limitations concerning company names and payment requirements.
3. Limited company types
The most popular form is a Private Limited Company, which can’t offer public shares and can have as many shareholders as desired. Every limited company is required to have a minimum of one director. A company secretary is no longer legally required for private limited companies following the Companies Act 2006, however you might still want one.
Public limited companies (PLCs) differ in that they can offer public shares to raise funds and they’re legally required to have a minimum of two directors and a company secretary.
All limited companies must fulfill the following requirements:
• Registration at Companies House
• Annual account filing with Companies House
• Annual submission of a Confirmation Statement
• Annual income reports to HMRC
• Annual Corporation Tax return, with liabilities paid within nine months of the company’s year end
• All company employees pay income tax and National Insurance Contributions (NICs) on all income they receive.