So, you’ve decided it’s time to forge your own path, you’re about to bring your big business idea to life with your own limited company. But how do you even start?
The great news is that setting up a limited company is a relatively and straight forward process. In this article we’ll give you an overview of how to set up your limited company and we’ll detail a few items that you’ll need to consider before doing so.
Let’s state the obvious for a second, you will need to pick a suitable company name (avoid any sensitive words, you can find out more about that stuff here). You’ll have a choice as to whether you’d like your company name to be superseded with ‘Limited’ or ‘Ltd’.
Ok, you’ve selected the perfect name for your limited company, congratulations, now, you must decide on who the shareholder(s) and director(s) will be. For example – for a one man band the answer is obvious – you. For husband/wife (or other multi party companies) you might have some shareholders, who are not listed as directors or vice versa. If you’ve decided on multiple shareholders, you will need to then decide how you are splitting the shares, i.e. 50:50 or 25:25:50 and so on.
Once everything is agreed, now it’s time to complete an application to Companies House. You’ll need to apply for a certificate of incorporation. This confirms the company legally exists and will show your assigned company number and date of formation. You will need the following pieces of personal information about yourself, and any other shareholders or directors –
• Place of birth (incorporation)
• Mother’s maiden name (incorporation)
• Father’s first name (incorporation)
• Residential address (incorporation and due diligence)
• Passport (incorporation and due diligence)
• Utility bill (due diligence)
It will cost £12 and can be paid by debit or credit card. If there are no issues, Companies House can process your application in as little as 24 hours. Once you have the certificate of incorporation, you can go ahead and work on getting your business bank account opened – yes, you do need a business bank account. Every limited company should have its own account, so that you can keep business and personal transaction separate.
Once you have sorted out these steps, it will be a short wait for HMRC to issue your company with a UTR (unique tax reference) number, and then you’ll be able to register your company for necessary taxes (corporation tax, PAYE, VAT) and your shareholders for self-assessment. Once you have done all this, you are finally finished, and good to go.
Now, we understand that all of those steps can seem like a bit of a hassle, so why not let us do it for you? We’re experts at it, and we can assist with bank account set up too! Here at Ezyco want to help make you a success, and that starts from a solid foundation. Get in touch if you’re thinking about setting up a limited company, or, have a look at our other articles to learn more.