guide to starting a limited company

8/2/2019 Guide to Starting a Limited Company

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Guide to setting up a limited

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Contents

Section 1: Why go limited?

Section 2: Choose a name for your company

Section 3: Understand director responsibilitiesSection 4: Prepare the paperwork

form IN01

memorandum of association

articles of association

send application to Companies House

Section 5: Notify HMRC

Section 6: Set up your business bank account

Section 7: Start trading

Section 8: How Brookson can help

In this guide we take you step-by-step through the process of registering your business

limited company.




1

Why go limited?

The process for setting up a limited company is illustrated below:

Setting up a limited company

This guide provides you with details regarding the process of setting up a limitedcompany.

To understand the pros and cons of working through a limited company compared

to other ways of working, please read our Choices Guide

http://www.brookson.co.uk/guidance/Your-Choices---New-to-Contracting---Free-Guide/







2

Choose a name for your company

If you haven’t yet chosen a name for your limited company, you need to choosea name that does not:

duplicate an existing company name, unless it is part of the same group

suggest a link with Government bodies

suggest that your company is something that it is not, for example,

‘international’

use, without permission, any of the words or phrases on the Companies House

list of prescribed words.

offend people

There are some ideas below to take into consideration when making this decision:

Should the business name include your own name?

E.g. John Smith Limited

Will it indicate what you do?

E.g. Gas Engineering Services Limited

Would you prefer a more professional approach or should the name reflect

your personality?

E.g. TPC Services LimitedDo you want a more old fashioned name to indicate stability or longevity?

E.g. Williams and Sons Limited

If you are targeting a local area, maybe use the Town or City?

E.g. Manchester IT Solutions

You can check the availability of company names by visiting www.jordans.co.uk .














http://www.companieshouse.gov.uk/about/gbhtml/gp1.shtml#appA


http://www.jordans.co.uk/








3

Understand director responsibilities

If you are opening your own limited company you are usually a director and

shareholder of the company. The different roles within a limited company are outlined

below.

Director: Private companies must have at least one director. The director is

responsible for:

running the business day-to-day

managing the company bank account

preparing accounts and annual returns

reporting changes to Companies House.

You cannot be a company director if you:

have been disqualified by a court

are an undischarged bankrupt

are under 16.

Company secretary: If you are opening a private limited company y ou don’t have

to appoint a company secretary by law, however you may want to appoint one to

help you meet your director’s responsibilities. This role is essentially an administrativeone which can assist you in running your company.

The director and company secretary, if appointed, are responsible for ensuring

that the limited company meets its obligations and is run in accordance with The

Companies Act 2006. Director responsibilities should not be taken lightly as the

director must ensure the limited company complies with company law, accounts

are produced properly with full disclosure, makes all statutory returns, is adequately

insured and meets health and safety obligations.

Decide who will subscribe to shares

There are different types of limited company, but most small and medium-sized

businesses that opt for limited company status become private companies limited by

shares.

Shareholders subscribe to these shares and depending on the type of share they can

receive dividends and vote to make decisions about the company.

To begin with, you may be the only shareholder; however you have the option to

include other shareholders.




4

Prepare the paperwork

If you are using a company formations agent they will take the necessary details

and prepare all of these documents for you as part of the service.

IN01 is your application form for registering your company at Companies House.

It asks for:

contact details for the subscribers of the company

address of the registered office

statement of capital and initial shareholdings

The Memorandum of Association is a document that contains the company name, registered office, names of its members (director, shareholders) and the

number of shares held and by whom.

Once your company has been incorporated & registered as a limited company

– you cannot amend the Memorandum of Association.

Articles of Association are the internal rules by which the company will be

managed. Every company must have articles by law and all the members of the

company must observe these rules. Articles include details about:

directors - their powers and responsibilities

shares, dividends and distribution

decisions will be made about the company

other administration issues

directors' powers

Send documents to Companies House: You can register your company

electronically or on paper documents, whichever you find easier.

The following documents must be sent:

IN01

Memorandum of Association

Articles of Association

Once these have been sent Companies House will provide you with a Certificate

of Incorporation. The Certificate of Incorporation provides the name of the

company, unique registration number and place of registration.




5Notify HMRC

Once you have received your Certificate of Incorporation you must contact yourlocal HMRC office to tell them about your company formation.

Set up your business bank account

You must open a business bank account. Not only to keep personal money separatebut also to satisfy Government officials and ensure accountability and transparency

in all of your business dealings. It is important to understand that you should avoid

using the business bank account as a personal account.

You could also open a business savings account to set aside your Corporation Tax

until due. If you do this, you can earn better interest in the nine months between filing

your annual accounts and paying your tax.

6

Start Trading

When you have your Certificate of Incorporation and bank account, you are ready

to start trading as a limited company.

You need to show your company name and registration number, registered office

address and place of registration on any letters or emails. You will also need to

display the company name in full including Ltd/Limited or the Welsh equivalent on:

invoices

estimates

receipts

cheques

faxes

order forms

7




How Brookson can help

We know you’re keen to get on with running your business. But the paperwork ofsetting up your limited company can take time away from your core business

activity, and on the forms there may be questions you’re not sure about.

At Brookson we help people set up limited companies every day. We can help you

save time, and help you:

work out if a limited company is appropriate for your business

establish a shareholding structure suitable to your business requirements

understand your responsibilities as a company director

appoint officers with our Company Secretarial Service

find a name for your business that Companies House will accept

prepare all the paperwork – IN01, Memorandum of Association and Articles of

Association – you need to send to Companies House

make sure all your documents comply with current legislation

set up a business bank account

And it doesn’t stop there, as an accountant, Brookson can assist you with all aspects

of running your limited company, from the basics of preparing all your necessary

returns to providing advice on registering for VAT and tax advice to suit your personal

circumstances.

We also provide a number of specialist services providing legal, bespoke tax,

overseas and company secretarial advice. By using our Company Secretarial

Service, we will be able to reduce the hassle of filing responsibilities and statutory

requirements.

Call us now on 0845 058 1400 and see how we can help you open your

own limited company.

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guide to starting a limited company

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