Thinking about setting up a limited company?
Let me tell you, setting up as a limited company is one of the most tax-efficient ways to get paid for your hard work!
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 pitch for work you wouldn’t be able to get as a sole trader.
Here are 4 easy steps you need to take to set up your limited company today:
Step 1 - Choosing the type of company
When you are searching for limited companies, you may also come across public limited companies…
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.
There’s no minimum share capital requirement for LTDs. You can set up a LTD with a single share worth £1 if you wish.
Step 2 - Picking your company name
This can be a fun and exciting part if you have not picked your name yet, but if you have, you need to register it. 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.”
Step 3 - Forming your limited company
If you are the company director, you will need to provide some details to help Companies House identify you as a company director. These include:
Letting them know what type of business your limited company will carry out by submitting a SIC code (Standard Industrial Classification code) This code is all about what you do.
Decide what addresses you want to register for your business. You’ll need to choose your Registered Office Address, and provide a service address, but these can be the same.
Decide on the ownership of your company – how many shareholders do you want and how many shares will they have each.
Once you’ve done this, you’re good to go.
Step 4 - Complete forms
After you have registered your name, you will have some forms to fill out including:
Memorandum of Association – limited company name, location, business type
Form 10 – director’s names, addresses and registered limited company address
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
Really, that’s how you become a limited company. There are some additional factors you will need to do, including looking at a business bank account and small business insurance.
If you need help with your limited company, book in a call with us today!