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If you’re looking to start your own company, there are a few things that you need to do to get started.
Set up a private limited company
To set up a private limited company, you must first register with Companies House, known as ‘incorporation.’ To do this, you’ll need:
- The company name
- An address for the company
- At least one director and shareholder
- The agreement of all initial shareholders to create the company
- Details of the company’s shares and the rights that are attached to them
- Rules about how the company will be run.
You can register your company online, by post or by using an agent or third party software. Online applications are usually registered within 24 hours, whereas postal applications generally take around 8-10 days.
You should also ensure that you register for Corporation Tax within three months of starting up your business.
Your company address should be a postal address and it should also be based within the country that your company is registered in. For example, a company registered in Wales must have a registered office in Wales.
Appoint directors/company secretaries
A company must have a minimum of one director. Directors will be legally responsible for running a company, making sure that any accounts and reports are done properly. The director must be over 16 years of age. For a private limited company, you don’t need a company secretary, but some companies choose to use them to take the burden of some of the director’s responsibilities.
A company that is limited by shares must have at least one shareholder, who can be a director. When you first register a company, you need to make a statement of capital, with the number of shares that the company has and the total value.
Memorandum and articles of association
When you register your company, you need to issue a legal statement signed by all initial shareholders agreeing to form the company. This is known as the memorandum of association. Secondly, you need to include written rules about how the company will be ran, this is known as articles of association.
Registering for Corporation Tax
If you don’t register your business for corporation tax within three months, you could get a fine. To register, you will need the unique taxpayer code sent to your company’s registered office.
It is important to note that you don’t have to sell anything to be classed as ‘doing business’, activity could include:
- Employing someone
- Renting a property
To register, you will need to tell HMRC:
- The date that you first started to do business.
- Your company name and registered number.
- The main address that you do business from.
- What kind of business you do.
- The date that you will do your annual accounts.
- The name and home address of the company directors.
Set up as a sole trader
Sole traders must set up their business through HMRC and follow certain rules on running and naming their business. To class as a sole trader, you run your business as an individual and are self employed. You can still take on staff, it just means that you as the owner are solely responsible for the business.
You will be responsible for:
- Keeping a record of your business’s sales and expensive
- Completing a self assessment tax return each year
- Paying income tax and national insurance on your profits
- Business debts
- Bills for anything that you buy for your business
- Registering for VAT
When naming your business, you should check the Companies House register to check that the name you want hasn’t already been taken. Your name must also be unique and not similar to another company’s name. You can also trade in a different name to your registered name.