Operating as a limited company may be your preferred option if you want to start a contracting service since it is the most tax-efficient option. If you’ve already decided to start a limited company, you may be wondering how to go about it. These simple steps will help you start up the limited company without stress and delay.
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Understand how a limited company operates
If you’ve not understood how a limited company operates, it would be difficult to know how to start yours. Legally, a limited company has a separate identity from the owner and carries out business operations with its name. The company also has its bank account, pays taxes, and can acquire debts like anybody. This makes understanding the limited company’s legalities necessary before setting it up.
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Decide on important things
It is necessary to decide on the company’s essentials, such as its name, the location it will operate from, and who will be involved in running the company. If you hope to change the company or expand it in the future, consider opting for a generic company name.
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Issue company shares
You can have shareholders in the company if you wish. If you want shareholders, ensure the total shares are divided into the capital. You can also sell a share to someone but ensure you have a tie-breaker for when disagreements arise in the future.
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Register your company with Companies Houses
After determining your company name, shares, and other important details, the next step is setting up the limited company with Companies Houses. You have to visit the Companies House website to set up your company. The process is quite simple, and you can use the guidance form online to get through the process.
You need to choose a unique company name because the Companies House will verify it, and you have to appoint a company director and secretary. If you don’t want to stress yourself with the process, you can hire a professional accountant to help you.
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File a memorandum of association
You need to file a Memorandum of Association with Companies House. A Memorandum of Association is a document containing why you are setting up a limited company and how you intend to run it.
If you have tax disputes or legal issues in the future, the Memorandum of Association will come in handy. For example, if you have an IR35 case, the court can request the document.
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Consult an expert
Setting up your limited company online may be easy but getting a professional is advisable. An accountant can suggest different structures and ways to make your business company tax-efficient to ensure you are protected.
A professional already knows and understands the industry, so they will use the experience to take care of paperwork and documentation, handle your payroll, and offer VAT accounting service, provide tax advisor at an affordable rate. The fee charged by an accountant will likely be a small price to pay for the amount of workload they will take off your shoulders.
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Get a business bank account
Getting a business bank account can be challenging, but you must consider the High street banks. An expert can help make this easy for you. You may also opt for a bank account service to help you set up your business bank account within a short time.
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Register for VAT
An important step in setting up a limited company is registering for VAT. You can register for VAT on the official HMRC website, which may be faster than going through the paper route. If you have issues with VAT registration, you can back bill your customers.
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Claim start-up expenses
You can claim the start-up expenses accumulated while setting up your limited company to serve as future revenue generated by the company.
Following these steps can help in setting up your limited company in no time. Alternatively, contact The Accountant London to help make the process faster and easier.