Some people are put off by making the leap from self-employed sole trader to limited company status even if the whole process is not as scary as it sounds.
Setting up a limited company is actually quite simple and could not only save you money on your taxes but also make you less financially vulnerable if the business should fail. The simple steps you will need to take when setting up a limited company are as follows…
Fill in an online form
The process starts by simply filling in an online form and sending a small some of money to cover the cost of the registration. Your details will be sent to companies house and within just a few hours, you limited company will be set up and ready to go.
Complete the incorporation process
This is just a matter of filling in the following documents. An accountant will be able to handle it all quickly on your behalf if this sounds daunting. You will need to complete the following forms:
A Memorandum of Association, which includes the limited company name, location and business type.
Form 10 which will require the director’s name(s), addresses and the address of the registered limited company.
Form 12 which states that the limited company will comply with the terms and conditions outlined in the Companies Act.
Articles of Association, These outline the director’s powers, shareholder rights and so on.
Next steps – take care of any legal requirements which will include
Submitting both annual accounts and annual returns and filing them with Companies House annually. These accounts can be abbreviated if the company is small and there will also be a requirement to pay corporation tax within 9 months of the company year end.