Are you working as a self employed and thinking about changing to limited company?
Then please read moving sole trader to limited company blog.
There are different types of limited companies. It is better to consult an accountant near you or take advise from online accountant if you do not have the time to go to local accountant.
What is Limited by Shares company?
Limited by shares organizations are business that exist to make profit. Once you set up limited company by shares:
It becomes legal entity separate from the owner of the business. It means company assets and liability are separate from your own assets and liability. For example, if someone is trying to sue an ABC Ltd company, they can not recover any money from owner/shareholders personal assets if company do not have the enough funds to cover the debts.
Ltd company have shares and shareholders. Ltd company can hold any profit it makes from the business in its own name after paying corporation tax.
What is limited by guarantee company?
Limited by guarantee companies are not for profit organizations. It would have legal separate title and like limited by shares it can hold assets and liabilities in its own name.
Instead of shares, it would have guarantors and a ‘guaranteed amount’
Profit it makes will be invested back into the company.
I will focus on limited by share company.
What should be your company name?
As you have decided to start a ltd company, first step is to check the name if it is acceptable by company house. Your name should not be same as any another register company’s name. If the name is too similar to another trade mark you may have to change it if any individual make a complaint. Your company name should end with Ltd or Limited. for example Online Accountant Ltd,
Online Bookkeeper limited
You can check the on company house for availability.
second step is to chose directors and a company secretary
in LTD company you must appoint a director but it is not mandatory to appoint a company secretary.
What does the limited company directors do ?
As the director of ltd company you will be ruining the organisation within the framework set out in the articles of associations.
Director are responsible for keeping company records and report changes. Pay corporation tax and file company accounts. Mostly director can hire other persons such as accountant or bookkeeper to perform such tasks but directors are legally responsible for company accounts filling and other tasks listed above.
It is important to note that directors can be disqualified if they do not perform the duties of director.
What is the difference between a shareholder and a director ?
Shareholders are owner of the company. Director only runs the company. The director and shareholder can be the same person.
What is PSC and company requirements ?
Next step is to identify people with significant (PSC) control, in majority cases person holding 25% of voting right is counted as PSC.
Company is require to record PSC details in company PSC register with in 14 days
Company would have another 14 days to report it to company house.
If there is any changes in PSC it should be reported to company house with in 28 days.
What documents do i require to run a ltd company ?
Next step is to prepare a ' memorandum of association' and articles of association.
Articles of association is rule guide to run a company and memorandum of association is a legal statement signed by all shareholders or guarantors to form the company.
What is SIC Code ?
SIC code identifies what your company does.
you will also need to chose official address to register your company. There are rules for company address please check
once you got all the documents and information mention above. It is time to register your company on company house.
you will also be able to register for corporation tax on the same time.