Limited Company Formation
If you're starting up a business, you may want to form a limited company. There are a number of reasons why you may want to set up a limited company (see our sole trader or Limited Company pages) but as a rough guide, if your company is turning over more than £60,000 a year it's worth considering. Speak to an accountant for more bespoke advice.
If you're a sole trader, you may want to register a business name in case you do want to eventually set up a limited company. Registering your name is simple, all you have to do is form a limited company, which only takes five minutes. The good news is you don't even have to trade through it to protect it, as registering it is often sufficient enough.
Once you have registered your company name and formed your limited company, your company will remain dormant providing you don't trade through it. Once dormant, there are a couple of things that need to be completed each year, but as a client of Easy Accountancy we can manage this for you for just £60 plus VAT per month. This includes:
- Informing HMRC that your company is going to be dormant for the time being
- Filing dormant accounts once a year
- Filing an annual return – this is merely confirmation of statutory details, such as the registered office address
If you then decide to go limited, you simply start trading through your limited company and it automatically becomes active.
How do I register my business name and form my limited company?
The whole process is very straightforward and can be completed in a matter of minutes. All you need is a company name (you can check whether this is available free of charge on the site) and a credit card to complete the transaction.
Once you have formed a limited company, you will receive all the necessary documentation, along with an application for free business banking, VAT and PAYE registration details. If you are simply forming your company to protect your name, then keep these applications to one side in case you decide to start trading as a limited company instead of a sole trader at a later date. If you are planning on running your business through a limited company straight away, then you will need to fill these out - and your accountant will be able to help you with this.
During the online formation process you will be asked for several pieces of information, which are as follows:
- Director details - This is you. The Director controls invoicing, the company bank account and decides on how much to pay themselves, which is made up of a combination of salary and dividends.
- Secretary details - Following a change in legislation, as of 6 April 2006 there is no requirement for a company secretary You will need to allocate shares in the company.
- Subscriber/shareholder - Dividends are distributed to the shareholder(s) of the company, which is how you will take most of your income.
How much does it cost?
Forming your company costs just £125 plus VAT, which is one of the lowest fully inclusive prices available. You can of course find cheaper prices on the Internet but they rarely include everything you need, such as VAT and PAYE registration, each of which can cost as much as £75 plus VAT from other accountants. Plus, cheap online formations often don’t provide any telephone support, so if you do get stuck who is going to help you? Forming through Easy Accountancy will give you peace of mind, as you can call our Client Liaison Team directly who will be more than happy to assist you.
Our formation package covers:
- Helping to organise a Company Bank Account
- Registering the company for VAT and PAYE
- Advice on the optimum share structure of your company
- Telephone support throughout the process
If you are leaving your company dormant, then keep the paperwork for your bank account and PAYE/VAT registration aside. You can complete them if and when you decide to activate your limited company.
For more advice on how Easy Accountancy can help you and business, or to find out more about our fixed fee packages, please call 0500 234 111 / 01442 275767 or email firstname.lastname@example.org.