How to set up a Private Limited Company - In 4 easy steps

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!

0 views0 comments

Recent Posts

See All