Setting up a new company?
Thinking of starting a new business? or, already active but not sure what your obligations are as a director? Be sure to read this article as we cover some crucial information that you must know and act as a business owner from forming your own limited company to paying your tax.
When it comes to forming a limited company, it can be somewhat confusing at first when you hear words like Companies House, Registered office address, Director’s service address, Confirmation statement, tax and more. It is best to familiarise yourself with these words as you will come across them. Be at peace, if you don’t know them as we try our best to cover them in this article in context in a chronological order starting from forming your limited company.
Registering your company with the Government
First and foremost is registering your company with the government so they know it exists as a legal entity. But before you do, it is imperative you understand the difference a Limited Company and Sole Trader. You will have to choose which of the two you want your company to be registered on the government’s website so I recommend you do some research on both to understand which reflects your company. In this article we will cover Limited company.
As for the Limited Company, you can either register directly on the governments website (click here) or alternative, there are many businesses that offer to do it for you with a cost. It costs £12 on the governments website and usually takes up to 48 working hours to register.
You Need an Address
When registering your company on Companies House, you have to input an operating address for the company, known as Registered Office Address and Director’s service address. Although, some use their home address, we advise against that as your home address will become public. Alternatively, if you do not have a company address or office address, we recommend using a virtual address which is cheap and easy to obtain. Using a virtual address to register your company on Companies House will help safeguard your home address from any prying people.
We provide one of the cheapest virtual address services in London, UK. What’s more our address is in the heart of one of London’s business areas Baker Street which will definitely please your customers. Please see our packages here.
It is compulsory for all registered companies to submit a Confirmation Statement to Companies House every year. Filing a Confirmation Statement entails providing Companies House with updated information about your company i.e. address, director(s), etc. It costs £13 to submit a Confirmation Statement. A link to file a Confirmation Statement can be found here. It is super easy to do and can be completed within 5 minutes.
Limited companies have to pay Corporation Tax to the government every 12 months on profit. When you register online with Companies House (as mentioned above), you’ll automatically be registered for Corporation Tax and PAYE ( Pay as You Earn). So you won’t need to apply for this.
Company Tax Return
It is also mandatory for all companies to submit a tax return to the Government every 12 months. This informs them if your company owes them any tax and you still have to submit it even if you don’t owe them any tax. Failure to submit your tax return on time may lead to a financial penalty.
That wraps up our main points. Here are some secondary information to help you with your business.
Business Bank Account
Opening a business bank account for your company is better than using a personal bank account. It makes your company look more professional to your clients. There are many UK commercial banks to choose from like HSBC, Barclays, Natwest, etc. Each bank may offer different packages for their business accounts so pick one that best suits your company’s needs which boils down to your most common method of banking i.e. online, telephone or in a bank branch. To open a business account, you can either call or visit your nearest bank and ask for an appointment. You may be required to bring your limited company certificates.
Register a Domain Name and Build a Website
Depending on the type of company you are, you may or may not need a website. But before you go about designing a website, you need to purchase the Domain Name first. Think of it as purchasing the exclusive right to use that name for your website so someone else can’t use that exact name. Here is a list of some popular websites where you can buy domain names from know as Domain Name providers .
Now comes the fun part of building a website so let loose your imagination and design an eye-catching website that will bring in the customers. The online web has immense potential to give you access to customers globally. There are many online platforms that aide you in creating a website like Wix. Alternatively, you can hire a web designer/developer to build it on your behalf. You can find skilled web designers on Fiverr or Freelancer.
Hope the above information has been helpful and beneficial for you.