Launching your own business enterprise is the first step on the road to fulfilling your dream of self-sufficiency - but it's important to make sure you cover all of the pesky administrative bases before you get started. Here's our step by step guide on company formation.
Setting up a private limited company with the UK means registering with the government's "Companies House" arm, which collates and stores information privately owned businesses across the country.
To do this, you need a suitable company name. Companies House has strict and complex rules relating to names for new businesses, as their status as private or public companies must not be misleading to clients and customers. You also need to be sure you do not infringe the copyright of any existing company names.
In addition, an operational address will need to be supplied on your application for correspondence purposes. If you don't yet have an office space fully up and running, you can cite your home dwelling, or even a rented PO Box, for the purposes of your registration. Just remember to keep the authorities appraised of any changes when you move.
You also need to nominate one person from your business to act as your appointed "director". This doesn't necessarily have to be the largest shareholder, although in a lot of cases this is best practice.
Companies House will in addition ask you to disclose information on your major shareholders - at least those with a stake of 25% or more anyway. The shareholders must all put their names to a "memorandum of association"; a document which confirms their legal commitment to the business venture.
Once you have acquired all the above information, as well as the signatures of your major shareholders, you can apply to register your company through Companies House.
This can be done either:
- By going online at resources.companieshouse.gov.uk. This method costs you a nominal fee of £12, with applications responded to within 24 hours.
- Via post. To apply by this method, you must include a cheque of £40, with applications taking a conservative timescale of up to 10 working days. You can pay an additional £60 to have yours fast tracked, however, The form can be downloaded at the above website.
If you still do not feel sure and confident about the process of setting up your own business, you can contact specialised company agents who offer to do this instead of you for a certain amount of money. Their fees can vary based on what is included but the average cost is £10-£12.
Once this process is complete, you will receive a certificate verifying that your business is formally recognised and licensed by Companies House to operate in the UK.
From the date of the registration, you will then have three months to sign up for the HMRC's Corporation Tax.
Registering with the HMRC will not oblige you to make any immediate payment; you simply have to supply relevant details of your business - largely the same as those above - so that they can provide you with a date for your first account submission.
Remember that even if you do not anticipate making any profits for the initial period your business is in operation (which is not unusual in a lot of cases, given the number of start-up overheads) you will still need to declare your accounts to the HMRC.
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