Setting up your own limited company
There are a few steps to take when setting up a limited company, however, it is an easy process!
Choose a company name
When it comes to choosing a name for your company, think about words related to your industry or skillset so that people will recognise what your business offers, and make sure you keep it professional.
There are also certain rules to consider, for example, you need to ensure that the name isn’t already taken (you’ll need to look on the Companies House website to find this out), the name cannot include trademarked names or be offensive in any way, and the majority of private limited companies must end in either ‘Limited’ or ‘Ltd’.
For additional information on this, take a look at our Choosing a Limited Company Name page.
Choose company roles
A company must have at least one director and they will be legally responsible for running the business, making sure company accounts and reports are properly prepared and money is used wisely.
It’s not mandatory to have a company secretary, but if you do, their role is usually to help with some of the director’s responsibilities.
Shareholders
You will have to have at least one shareholder within the company (who can also be a director) and if there is just one, they will own 100% of the company.
There is no maximum number of shareholders and the price of an individual share can be any value, but each person will need to be paid their shares in full if the company was to shut down.
Register your company
You’ll need to register your company through Companies House – you will need the company’s name and address, as well as the names and addresses of directors, company security and shareholders.
You’ll also need a ‘memorandum of association’, which is a legal statement signed by all shareholders or guarantors agreeing to form the company, plus an ‘articles of association’ – these are written rules about running the company agreed by the shareholders or guarantors, directors and the company secretary. This process will take around 48 hours and comes with a small fee.
You can form a company with us – take a look at our Company Formation page for more information on this.
Expenses
Working as a limited company contractor means that you are likely to have a lot more expenses you can claim back on compared to other self-employed workers.
Claiming for expenses made for the running of your business can help to reduce your bill at the end of each year, which is why it’s so important for you to be aware of everything you can claim for.
Our Limited Company Expenses Guide will give you all the information you need on this, as well as our Can I claim for pre-trading expenses? page.
IR35
IR35 is a legislation that all contractors need to be aware of as it can affect things like take home pay and self-employed benefits and is based on a contractor’s level of risk, liability and responsibility as a worker
You can read more about this on our Using your Limited Company when inside IR35 page.
Hiring a contractor accountant
If you’re unsure of how to run your business in the most tax efficient way, or you need help and advice when it comes to paperwork, filing annual accounts or dividends for example, then hiring an accountant is certainly worth it.
There are a lot of accountancy companies out there, so it can be a daunting task choosing the right one for you. Each will offer different packages and benefits, so it’s best to look around and do your research.
Look for an accountant who:
- specialises in contractor tax
- will appoint you your own dedicated accountant
- has qualifications
- provides a fixed monthly amount
Take a look at our Is it Easy to Switch Accountants? page for more information on this.
If you’d like to sign up or need any further information, please give us a call on 01442 795 100 or you can email sophie.lewis@dolanaccountancy.com. There’s also the option to contact us via live chat.
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