There comes a time in the business journey of many entrepreneurs and freelancers where they need to decide whether to stay self-employed or become a limited company. If you are considering setting up a limited company, here are the steps you need to follow.

1) Make sure a limited company is right for you

While there are benefits to being a limited company, there are also more legal obligations. And for some businesses and freelancers, self-employment may be a better choice, at least initially.

So before you set up your limited company, check that it is right for you – or whether you’d be better off starting out or remaining self employed. You can read the pros and cons to each set-up and which might be right for you here.

2) Choose a name for your limited company

Once you know you definitely want to be a limited company, your next step is to choose your company name. You may already have a business name, or one in mind, but that doesn’t necessarily mean you can use that name for your limited company.

Your limited company name cannot:

• Be the same as another company name (you can search the list here).
• Contain a sensitive word or expression (unless you get permission here).
• Suggest a link to government or local authorities.
• Be considered offensive.

If your chosen company name has already been taken, you’ll need to choose a new one. You can read more advice on finding a name for your limited company here.

3) Decide on your directors

Limited companies need to have at least one director. Directors are legally responsible for running the company and ensuring that your company accounts and reports are prepared properly.

To be a director you must be 16 or over and not disqualified from being a director. You don’t need to live in the UK, but the company must have a UK registered office address. You must also provide a service or correspondence address. Your name, personal information and address are publicly available.

Limited companies don’t need a company secretary, but some companies use them to take on some of the directors’ responsibilities. However it is the directors who are legally responsible for the company, not the company secretary.

You can be a company secretary if you are a director, but not if you are the company’s auditor, or are an undischarged bankrupt.

4) Choose your shareholders or guarantors

Limited companies are usually ‘limited by shares’, which means they are owned by shareholders. These shareholders have certain rights, such as to vote and agree changes to the company.

Some companies are limited by guarantee, which means they have guarantors and a ‘guaranteed amount’ instead of shareholders and shares.

Most companies have what are called ‘ordinary’ shares. These mean that directors get one vote on company decisions for each share, and receive dividend payments.

A company limited by shares needs to have at least one shareholder (this can be a director). If you’re the only shareholder then you will own 100% of the company. There’s no maximum number of shareholders.

The price of shares can be any value. Shareholders must pay for their shares in full if the company is shut down. So, to limit your liability to a reasonable amount, it’s common to choose a low share value, such as £1.

When you register your limited company you will need to provide the following information about your shares:

• The number of shares of each type the company has and their total value
• The names and addresses of all shareholders

5) Identify persons with significant control of your company

There is always one or more people who own or make controlling decisions about a limited company. This is known as a person with significant control (PSC).

You need to let Companies House know who your PSC is/are, and the level of their shares and voting rights when you set your company up. And if any of these details change later on, you need to inform Companies House.

A PSC will usually have:

• More than 25% of shares in your company
• More than 25% of voting rights in your company
• The right to appoint or remove the majority of the board of directors

6) Prepare your legal documents

When you incorporate a limited company you need to prepare the following legal documents:

• A memorandum of association: This is a legal statement signed by all initial shareholders or guarantors agreeing to form the company.
• Articles of association: These are written rules about running your company, agreed by the shareholders or guarantors, directors and the company secretary (if you have one).

If you register your company online, you won’t need to write your own memorandum of association. Instead, it will be created automatically as part of your registration.

For your articles of association, you can either use standard articles (known as ‘model articles’) or write your own and upload or send them when you register your company.

7) Make sure you’re aware of your filing obligations

As the director of a limited company, you are responsible for ensuring you file all the required documents on time. These include records about the company, and financial and accounting records.

HMRC may check you’re paying the right amount of tax, so it’s wise to hire an accountant when running a limited company. Not only will they ensure you are paying the correct tax, but they’ll know what documents you need to file, when, how and can submit them for you.

Remember that you also need to keep company records for at least six years from the end of your last company financial year. You can read more about the records you need to keep, and for how long, here.

8) Register your limited company

When you’re ready to become a limited company, you will need to register with Companies House. To do this you’ll need an official address and a Standard Industrial Classification (SIC) code. Your SIC code identifies what your company does; you can find out what yours is here.

Once you have registered your limited company you’ll get a certificate of incorporation which confirms your company legally exists and shows your company number and formation date.

Most people also register for Corporation Tax at the same time as registering with Companies House. if you aren’t ready to do this you can register separately with HMRC after you’ve registered your company with Companies House.

Get help to set up your limited company today

It can be daunting setting up a limited company yourself. If you’re ready to incorporate your business but need help, you can use a company like 1st Formations. They’ll walk you through four simple steps to setting up and registering your company:

1. Company name: Check your company name is available for registration.
2. Choose a package: Find the right package for your needs.
3. Checkout: Proceed to checkout (you can also add additional services).
4. Company details: Fill in your company details and they’ll do the rest.

Packages range from as little as £12.99 to register your company and get your digital documents, to more comprehensive packages that include registered addresses, VAT and PAYE registration and confirmation statement.

If you’re just getting started and want to secure your limited company status, this might be a good option for you. You can then find an accountant to prepare your accounts later on.

The post How to set up a limited company in eight steps appeared first on Talented Ladies Club.

In the UK, the two most popular options are to go the self-employed route or to form a limited company. In this article, we look at the self-employed and limited company structures and highlight the pros and cons of each. Let’s get started.

Self-employed: A quick explanation

As a self-employed individual, you will generally be referred to as a sole trader (or sole proprietor). Under this model, there is no separation between you and the business itself – you are, essentially, the same legal entity. 

Self-employment is a popular option for many people taking the first step in working for themselves. In 2023, there were around 4.24 million self-employed workers in the UK.

To set up as self-employed, you must register directly with HMRC.

Limited company: A quick explanation

Limited companies are run by directors and owned by shareholders (a company can be operated with several people sharing these roles or just one person taking it all on). As a limited company, there is a clear difference between the individuals involved and the company. 

According to Companies House (the UK’s registrar of companies), between July and September 2023, 219,254 new companies were incorporated in the UK. In total, at the end of September, there were 5,213,416 companies on the total register.

To set up a limited company, you can either register directly with Companies House or use a third-party specialist such as 1st Formations.

The pros of being self-employed

So could being self-employed be right for you? To help you decide, here are five pros.

1) Speedy start-up

Whilst registration with HMRC is compulsory, you can actually start trading before you complete the registration process (which itself is quick, simple, and free).  

You will need to set yourself up as self-employed (also known as a sole trader) with HMRC if:

• You earn more than £1,000 from self-employment in a tax year (6 April to 5 April)
• You need to prove you’re self-employed (for example to claim Tax-Free Childcare)
• You want to make voluntary Class 2 National Insurance payments

2) You have minimal admin

Other than the administration involved in the day-to-day running of your business, the only admin you need to take care of is sending in a Self Assessment tax return.

While you may not have many admin requirements, it’s important to keep business records and records of any expenses. You will also need to save up for tax, as it’s not deducted at source; instead you will pay it after submitting your tax return.

Not sure how much you need to save for tax? You can budget for your Self Employment tax bill using this handy HMRC calculator.

3) Payday is when you want

Your business’ money is your money so you can use it for what you want, when you want. Although, you need to ensure your business can pay its bills, and you can pay your tax bill. This is where being aware of your outgoings (expenses) and how much you will need to save for tax and National Insurance is important.

4) You can do business in private

Your financial information is kept private, meaning it won’t be published anywhere. When you are a limited company, some information is public knowledge with a limited company. This includes:

• Names, dates of birth and contact addresses of directors
• Details of people with significant control (PSCs)
• Your accounts (and whether or not they have been filed on time)
• Your registered offices
• Any outstanding charges, such as mortgages on properties owned by the company

5) You have the flexibility to go bigger

If business is going well, you can expand into a limited company, which is a relatively simple process. How do you know when the right time to move to a limited company is? As a rough rule of thumb, it can be more tax efficient to incorporate your business once you earn over £30,000 a year in profit.

You may also want to protect your business name/brand, attract larger clients, or limit your liability at some point. If so, becoming a limited option may be the right option for you. If you are a freelancer or contractor, you might find that being a limited company enables you to quote for more contracts.

The cons of being self-employed

And here are five cons of being self-employed.

1) Business debts are your debts

Because there is no legal distinction between you and the business, you are personally liable for any business debts. This means you will need to pay them yourself, and if you do not, your creditor can take action against you. If they do, your business and personal assets could be at risk.

2) Questionable tax efficiency

This will always depend on circumstance but typically, the self-employed/sole trader business model is not a tax-efficient one.

The good news is that, as long as your profits (and any other earnings) don’t go over your annual personal allowance (£12,570 a year for 2022/23), you won’t pay any income tax. You also don’t need to pay any National Insurance Contributions (NICs).

However, your tax bill starts to climb once you start paying income tax and self-employed NICs. Compare the 20% or 40% income tax you pay on profits as a sole trader to the 19% corporation tax for small limited companies, and going limited starts to look like an attractive option.

3) You can give off an amateur impression

Self-employed individuals are sometimes perceived to be ‘small-time’, which can make it hard to appeal to customers and grow your business. This can also restrict you from some freelancer contracts when working for larger companies.

4) Investment challenges

If you are considering expanding or seeking investment, being a sole trader will count against you. Attracting investors can be tricky because of the perceived size of your operation, and because they can’t be rewarded with a stake in the business through shares.

5) Selling the business isn’t easy

And finally, the lack of separation between you and the business can complicate matters if you ever decide to sell up.

As a sole trader you can’t sell your right to own your business – you can only sell your company’s assets. Once someone has bought these assets, your sole proprietorship dissolves and the new owner will need to create a new business structure.

The pros of running as a limited company

It might be that running as a limited company is a better choice for you. To help you decide, here are five pros.

1) Your finances are protected

The ‘limited’ in ‘limited company’ means ‘limited liability’ – if the company accrues debts, your personal finances are safe, unlike a sole trader. The exception to this is if you have an overdrawn director’s loan account (if you have borrowed money from your company and not paid it back).

2) It’s tax-efficient

This will depend on your circumstances but the limited company structure is more heavily associated with tax efficiency when compared to the self-employed model. See here for more detail as to why.

3) You’re more esteemed

The limited company model is one of the most well-known in the world and can give your business a competitive edge, especially when compared to sole traders.

4) You have greater brand protection

Company names must be unique and can’t even be similar to another name on the Companies House register, so when you form a company, you are locking down your company name.

If you’re not quite ready to become a limited company yet but want to protect your name and stop someone else using it, you can incorporate a company but then leave it dormant. This will keep your name safe until you’re ready to go limited.

5) It makes succession planning easier

Because limited companies and their owners are legally distinct, selling on (or passing on) a company can be a simple process. If wish to sell your ownership of your limited company, you have two choices:

• You can chose to sell your shares in your business (if there is more than one owner, they must all agree to the sale).
• Or, you can sell your company’s assets to a new owner instead. These might include equipment, furniture and fixtures, inventory, property and investments. 

Whichever way you choose, selling your shares or assets transfers all company liabilities to the new owner. This includes outstanding debts and loans, salaries and taxes.

The cons of running as a limited company

And here are five cons of running as a limited company.

1) Registration with Companies House is necessary

The company formation process could be considered complicated. Nonetheless, with the assistance of a company formation such as 1st Formations, it is still quick and simple.

2) You have filing obligations

There is more paperwork involved when you are a limited company. You must file annual accounts, confirmation statements, and tax returns. Plus, Corporation Tax should be paid on time and any company changes must be done in a compliant way.

Most limited companies hire accountants to prepare their annual accounts as they are more complex than completing a Self-Assessment tax return. While this is an extra expense, it can be a wise investment as your accountant should advise you of potential tax efficiencies.

3) You have a legal responsibility

You are legally obliged to ensure that the company meets all of its filing requirements. Failure to do so can result in high penalties and companies being removed from the register.

It is also a requirement to have a separate business bank account. However, while not legally essential, this is a good idea anyway if you are self-employed to make bookkeeping easier.

4) You need processes for payday

Money can only be withdrawn from the company as a dividend payment, a director’s loan, or as expenses – it’s not a simple case of just popping down to the cash machine and paying yourself.

5) Company information is public

As a limited company, information about you and your business is published on the public register, including director and shareholder names and financial information.

Which is right for you: self-employed or limited company?

As we have just highlighted, there are advantages and disadvantages to the self-employed/sole trader model and the limited company model. 

What’s right for one business will not be appropriate for another. However, because of the financial protection that a limited company provides its owner(s), running as a company is generally the ‘safer’ option. Plus, as sole trader businesses do become more successful, they often end up registering as limited companies anyway.

We hope this article has proven useful in helping you make the right decision for you and your new business.

About the author

Kate Moss-Robins is a Content Writer at 1st Formations.

1st Formations have helped register more than 1 million UK limited companies. If you have decided that a limited company represents your best route into entrepreneurialism, they can help from only £12.99. Their company formation process is entirely online and you could be ready to trade in as little as 3-6 hours. Take a look at their company formation packages now.

The post Self-employed vs limited company: What’s right for your new business? appeared first on Talented Ladies Club.

Being the owner of your own business is the main goal of many hardworking employees and sole traders. And while there’s a lot to consider before that all-important next step, this is a momentous occasion that deserves to be celebrated. 

However, before you make your next move towards future success and glowing reviews on Checkatrade, you’ll inevitably have a lot of questions and concerns about setting up a limited company. 

What is a limited company? 

A limited company is essentially a completely separate thing from the owner of that company. In other words, if a limited company experiences financial difficulties or a legal battle, the company itself is liable, and not the owner of that company. 

This kind of company is a lot different from being a sole trader, where the liabilities of a business rest on the owners’ shoulders. 

Can I set up a limited company?

Absolutely anyone of any nationality is legally allowed to set up their own limited company as long as they meet 3 main criteria:

• They aren’t subject to any UK government restrictions
• They haven’t been restrained via court order
• They aren’t an undischarged bankrupt 

You don’t need to live in the United Kingdom but the registered office address of your limited company will need to be in England, Wales, Northern Ireland, or Scotland. 

Is setting up a limited company expensive? 

Many people like the sound of starting up a limited company but assume it’s a costly process. However, it’s far more cost-effective than you think. 

All you really have to do is register your company with Companies House. How much does doing this set you back? Just £40 by post, or £12 to get registered online. 

Does a limited company pay less overall tax? 

Taxes are an inevitability in all walks of business, whether you’re a limited company, an employee, or a sole trader. But when it comes to paying less overall, you won’t be required to pay income tax or national insurance (depending on the salary you earn). 

However, you will be required to pay corporation tax, which tends to be less than other standard taxes. In other words, yes, taxes still exist, but you will pay a little less than usual. 

If I start a limited company, how do I pay myself? 

Like any business venture, starting your own limited company will have an effect on your finances. Especially when it comes to paying yourself in this new venture.

There are two main ways you can pay yourself when you’ve set up a limited company – by salary or by dividends. 

A salary can simply be transferred on a monthly basis from the company account to yours. This salary is subject to income tax and national insurance if it’s over a certain set amount. Dividends can be taken from the company profits after all necessary taxes have been paid. 

Photo by Daria Pimkina

The post Frequently asked questions about setting up a limited company appeared first on Talented Ladies Club.

When choosing how to set up your business in the UK, there’s no one size fits all solution; the right choice varies from situation to situation. You have three main options to structure it:

1. As a sole trader (or partnership if there is more than one founder/owner).
2. As a limited company.
3. As a limited liability partnership.

Most businesses would choose either option one or two. Limited liability partnerships are normally used by specific types of businesses (such as lawyers and accountants). In essence, they have the limited liability benefits that limited companies do, but they are taxed like a partnership.

On that basis, let’s focus on the two main scenarios – sole trader or partnership and limited companies – and see what the characteristics, pros and cons of each are.

How does a sole trader or partnership work?

The characteristics of being a sole trader or partnership are:

• No limited liability – the business is not a separate legal entity from its owner(s).
• Owner(s) are taxed on the profits made personally. Personal income tax rates go up to 45% for earnings over £150,000 per annum.

What are the pros of being a sole trader or partnership?

• No public filing of accounts. The business’ financial records do not appear on public record.
• If the business is loss making you will be able to offset these losses against your any other income you have personally, so potentially reducing the personal tax you will need to pay in that period.

What are the cons of being a sole trader or partnership?

• No limitation of liability. The owner(s) are personally liable for any liabilities the business has and their personal assets could be at risk.
• All profits are distributed and taxed on the owner(s).
• No flexibility in how the owners get remunerated by the business. All profits taxed under income tax rates on the owner(s).
• Does not offer a flexible structure to obtain further external investment.
• May not provide a credible image of the business in the marketplace.

How does a limited company work?

The characteristics of being a limited company are:

• Limited liability – the business is a separate legal entity from its shareholders/directors.
• The company pays Corporate Tax on the profits made in the business. Current corporate tax rate is 19%, reducing to 17% in 2020.

What are the pros of being a limited company?

• Limitation of liability – the owners are not held liable for any of the liabilities of the business.
• Provides flexibility of how the founders are remunerated. They can have salary, dividends and also be provided with benefits by the business eg. pension contributions, private medical cover etc. All of which provides greater tax planning opportunities.
• Being a registered limited company gives the business an impression of scale and being an established business, potentially access to a greater customer base that would not do business with a sole trader.
• A limited company provides a structure whereby third-party investors can invest easily in the entity.

What are the cons of being a limited company?

• The company’s accounts need to be filed on public record each year, within nine months of the year end.
• Running a company is more costly with annual public filings and financial statements needing to be prepared under the Companies Act.
• What option is best for you will depend on your specific business, the risks involved, the size of your business and how profitable it is. Getting the choice of structure right is important and doesn’t just come down to tax, so do get professional advice.

Which option is right for you?

When deciding which option is right for you, it’s important to think about where your business will be in the next three, five or ten years. Visualising how you will grow and develop your business may impact on your decision about its structure at the very beginning.

To contact Kreston Reeves for further advice, call +44 (0)330 124 1399 or email becca.munt@krestonreeves.com.

Photo by Lauren Mancke

The post Should you be a sole trader or limited business? appeared first on Talented Ladies Club.

Should you be self-employed or think about setting up a limited company? Ruth Anscombe from Vanilla Online Accountancy helps you weigh up your options.

Self employed vs limited company

So you’ve got a great idea for your new business. You’ve worked out how you’re going to fund getting started, you’ve started thinking about advertising, suppliers, customers and all sorts of other important issues. But should you be self employed or set up a limited company?

There are lots of factors to take into account when making the decision and if you get it wrong it could be quite costly. To help you make the right choice, here are are are some of the main issues you need to consider:

• Image – having a limited company might suggest that your business is bigger than it is and more well established, and you might feel that people will take you more seriously if you trade through a company rather than as an individual.
• Limited liability – as a sole trader or self employed person, you are your business. If you borrow money for work, then it is you personally that owes that money, and if it all goes wrong then you are liable for the businesses debts or you could be sued for problems such as breach of contract. Setting up a company reduces this risk as a company is a separate legal entity, so if the company owes money and can’t repay it, you don’t have to dig into your own pockets. There are a few caveats to this, though – for instance, if you have acted negligently or fraudulently then this won’t be the case.
• Tax savings – a self employed person pays tax and national insurance. A company only pays tax. Therefore you can reduce your overall tax bill by setting up a limited company. However, the reporting requirements are greater for a company, meaning that there is more red tape for you and bigger accountancy bills. We usually find that if you are making a profit of around £15,000 per year or more, you will save overall by using a limited company, but individual circumstances need to be considered.
• Financial flexibility – a limited company can be flexible in that other people can own shares in it (and so receive dividends, their share of the profit) and you can decide when to take money out of the company. If you are likely to be earning more money than your partner, both owning shares in your company can be a good way to reduce your overall tax bill.
• VAT – a common misconception is that limited companies have to be registered for VAT, but that isn’t the case. You need to register for VAT if your relevant turnover is over a threshold – currently £79,000 – regardless of whether you are a sole trader or limited company.
• Partners – if you are setting up your business with someone else, you become a partnership unless you set up a different arrangement. Partners are each self employed, taking a share of the profits. You might find a company is more beneficial or you could consider a limited liability partnership (LLP).

If you decide to set up a company, you will need to choose a name for it that has not already be used by another company. You then need to get it registered with Companies House. Speaking to an accountant before doing that can help you to be sure you make the right decision – many accountants offer a free initial consultation and if you need more support than that, you will probably find they have suggestions which pay for their fee in tax savings.

You may also find that they will set up your company for free if you decide to use their services for your end of year accountancy work.

The post Should you start a limited company or be self-employed? appeared first on Talented Ladies Club.

Once your Ltd company has been registered, you will get a Certificate of Incorporation that shows your company number and date it was formed. This is proof that your company legally exists.

What do you need to register a freelance Ltd company?

To register your Ltd company with Companies House you’ll need:

• Your company’s name and registered address.
• At least one director.
• At least one shareholder.
• Details of your company’s shares (this is called the ‘memorandum of association’).
• Rules about how the company is run (the ‘articles of association’).

How do you register a freelance Ltd company?

You can register your Ltd company with Companies House:

• Online (as long as your company is  limited by shares and uses articles of association).
• By post using form IN01.
• Using an accountant.
• Using an agent.

How much does it cost and how long does it take?

You can register your Ltd company yourself online. It will take 48 hours and cost you £15, and you can pay by debit card, credit card or Paypal. You can also register your application by post. This will cost £40 and take 8-10 days. You’ll need to pay by cheque, made out to ‘Companies House’.

If you wish, you can get a same day service by post, as long as your application is received by Companies House by 3pm. This will cost you £100.

Setting up a freelance Ltd company through an accountant or formation agent

The easiest way to set up a freelance Ltd company is through an accountant or agent. They will fill out all your forms and submit them to Companies House for you. How much this costs will depend on your accountant or agent, but as an example, Your Company Formations Ltd offers Company Registration Packages from £12.48. 

Some accountants charge their fee upfront, while others will include them in a monthly fee programme.

Need to know more about running a freelance business?

Not sure whether to stay self-employed? Confused about VAT? You’ll find lots of helpful advice in these articles:

• A quick guide to VAT.
• What is flat rate VAT?
• Are you eligible for flat rate VAT?
• How does flat rate VAT work for freelancers?
• When you need to register for VAT.
• How to register for VAT.
• Read our financial checklist for starting a freelance business.
• Learn about deducting and paying National Insurance.
• How to choose a name for your Ltd company.
• Find out if you need to complete a tax return.
• Should you start a Ltd company or be self-employed?
• How HMRC have made it easier to claim self-employed expenses.
• Are you really self-employed? Take the IR35 test!

The post How to set up a Ltd company as a freelancer appeared first on Talented Ladies Club.

Your freelance company name must end in Limited or Ltd (if your registered office is in Wales it should be Cyfyngedig and Cyf), and must not:

• Be the same as another company name (you can search the list here).
• Contain a sensitive word or expression (unless you get permission here).
• Suggest a link to government or local authorities.
• Be considered offensive.

What if your freelance name has already been taken?

If your chosen freelance company name is already being used, you’ll need to choose another one. If you really like the name you have chosen, and want to try and tweak it, there are some rules you need to be aware of. Companies House will reject the following changes to a company name that already exists:

• Adding official-sounding name endings like ‘limited’ or ‘plc’.
• Adding a blank space between or after a word.
• Adding punctuation such as a full stop or brackets.
• Adding words like ‘and’, ‘co’, ‘com’, ‘UK’, ‘services’ or ‘international’.
• Including symbols like *, =, % and + in the first three characters of the name.
• Adding ‘the’ or ‘www’ to the beginning of a name.
• Adding ‘s’ to the end of the name (whether or not it creates a plural).
• Changing any characters after the first 60 characters of the name.

To give you an idea of names that are too alike, if a company already exists with the name ‘Freelance Working Mum Ltd’, the following names would all be rejected:

• Freelance Working Mums Ltd
• Freelance Working Mum UK Ltd
• The Freelance Working Mum Ltd
• @ Freelance Working Mum Ltd
• FreelanceWorkingMum.co.uk Ltd
• Freelance Working -Mum Ltd

Protecting your freelance company name

Registering your freelance company name may stop another Ltd company from using the same name as you, but won’t give you any trademark rights. If you want to trademark your name or brand, you’ll have to do that separately.

The post Choosing a name for your Ltd freelance company appeared first on Talented Ladies Club.

Once your company has been registered you’ll receive a Certificate of Incorporation. This shows the company number and date it was formed, and is proof your company legally exists.

Need more Ltd company advice? Download your free guide here!

What do you need to register a Ltd company?

To register your Ltd company with Companies House you will need:

• Your company’s name and registered address.
• At least one director.
• At least one shareholder.
• Details of your company’s shares (known as ‘memorandum of association’).
• Rules about how the company is run (known as ‘articles of association’).

How do you register a Ltd company?

You can register your Ltd company with Companies House:

• Online (as long as your company is  limited by shares and uses articles of association).
• By post using form IN01.
• Using an accountant.
• Using an agent.

How much does it cost and how long does it take?

If you register your Ltd company yourself online will take 48 hours and cost you £15. You can pay by debit or credit card or Paypal.

If you register your application by post will cost £40 and take 8-10 days. You’ll need to pay by cheque, made out to ‘Companies House’.

You can also get a same day service by post, provided your application is received by Companies House by 3pm. A same day registration service will cost you £100.

Setting up a Ltd company through an accountant or formation agent

The easiest way to set up a Ltd company is through an accountant or agent. They’ll fill out all the forms for you, and submit them to Companies House. How much this will cost depends on your accountant or agent.

Some accountants charge their fee upfront, while others are happy to include the costs in a monthly fee programme.

Need more Ltd company advice? Download your free guide here!

The post How to set up a Ltd company appeared first on Talented Ladies Club.

Your company name must end in Limited or Ltd (or Cyfyngedig and Cyf if your registered office is in Wales), and mustn’t:

• Be the same as another company name (you can search the list here).
• Contain a sensitive word or expression (unless you get permission here).
• Suggest a link to government or local authorities.
• Be considered offensive.

What if your name has already been taken?

If your chosen company name has already been taken, you’ll need to choose a new one. If you still like the name you’ve chosen, and want to try and adapt it to get it accepted, there are some rules you need to be aware of. Companies House will reject the following changes to an existing company name in attempt to create a new one:

• Adding official-sounding name endings like ‘limited’ or ‘plc’.
• Adding words like ‘and’, ‘co’, ‘com’, ‘UK’, ‘services’ or ‘international’.
• Adding a blank space between or after a word.
• Adding punctuation such as a full stop or brackets.
• Including symbols like *, =, % and + in the first three characters of the name.
• Adding ‘s’ to the end of the name (whether or not it creates a plural).
• Adding ‘the’ or ‘www’ to the beginning of a name.
• Changing any characters after the first 60 characters of the name.

To give you an example of names that are too similar, if a company already existed with the name ‘Working Mum Ltd’, the following names would all be rejected:

• Working Mums Ltd
• Working Mum UK Ltd
• The Working Mum Ltd
• @ Working Mum Ltd
• WorkingMum.co.uk Ltd
• Working-Mum Ltd

Protecting your company name

Registering your company name may prevent another Ltd company from using the same name as you, but doesn’t give you any trademark rights. If you wish to trademark your name or brand, you’ll need to do that separately.

The post Choosing a name for your Ltd company appeared first on Talented Ladies Club.

You can take money out of a Ltd company in three ways if you are a director:

• Salary, expenses and benefits.
• Dividends.
• Directors’ loans.

Salary, expenses and benefits

As long as your Ltd company is registered as an employer, it can pay you a salary, expenses and benefits.

If you pay yourself a salary, you’ll need to take income tax and National Insurance contributions from it, and pay them to HMRC with your employers’ National Insurance contributions.

Dividends

If your Ltd company has made a profit, you can make payments to shareholders – these are called dividends.

You cannot pay more in dividends than your available profit from the current and previous financial years, and you must usually pay dividends to all shareholders.

To pay a dividend you must hold a directors’ meeting to declare it, and keep minutes of the meeting (even if you are the only director). You also need to write a dividend voucher showing the:

• Date.
• Company name.
• Names of the shareholders being paid a dividend.
• The amount of the dividend tax credit.

Directors’ loans

If you take more money out of your company than you’ve put in, and it’s not salary or a dividend, it’s called a directors’ loan. There are strict rules around directors’ loans, and it’s important to follow them.

If like lots of working mums who choose to start a business you use an accountant, they can help you decide the best way to take money out of your company and handle the paperwork for you.

The post How to take money out of a Ltd company appeared first on Talented Ladies Club.