A private limited company is one that is defined by gov.uk in the following way. It is “legally separate from the people who run it, has separate finances from your personal ones,” and it “can keep any profits it makes after paying tax”. There are many benefits to being in a private limited company – this status can affect the kinds of property and equipment you can hire, the types of funding you may be able to receive and the manner in which you employ your staff and management and handle your shares. Here are the steps you need to take in order to start up your private limited company:
Before you take any steps towards securing your company’s status and position, you need to know what it is and what it does. The first step should be to come up with a strong company name, which you know is unlikely to change in the near future. From this name, a strong brand image should grow, including logos, advertising approaches, colour schemes and many dozens of other ways in which people can identify your brand and pick it out from others.
A major practical element of your business will be the location from which it operates. Again, it’s good to have a firm idea of this early on, because this is the site at which you will be receiving official correspondence, and could be a major part of your business image depending on the nature of your work. Be sure you know how soon your business will be able to operate from this address, particularly if any refurbishment or structural changes are required.
3. Build Your Team
All you need for a private limited company is a minimum of one director, but having a company secretary and treasurer too can prove extremely helpful to assist in the running of the business, and many loans and grants require you to have both. As soon as you know how many roles you need to fill and what the relevant duties would be for each, you need to compile all the relevant documentation in order to take them onto your books. You also need to look into finding shareholders. The majority of private limited companies are “limited by shares”, which means that the shareholders who own them are allowed certain rights within the running of the business. Most of the time, the number of votes shareholders have per issue is the same as the number of shares they hold.
4. Official Documents
While working on your branding, you may want to note down the exact purpose of your company and the products or services it provides. You can then develop this into a company constitution, which is a document explaining what your company does and how and why it does it. You’ll also need a firm memorandum of association, which is a document of agreement signed by all shareholders upon the formation of the company that cannot be changed or updated after the company is registered. Finally, you need to put together your company’s articles of association, which are basically a list of rules your company must adhere to. The contents of this document must be viewed and agreed to by your company’s management, directors and shareholders.
Now it’s time to take the big leap and officially register with Companies House. You should have to hand all the previous information mentioned above. It’s actually very cheap to register a company – only £12 if you do it online or £40 by post (online registration takes around 24 hours to process, and you can use the same service to register for Corporation Tax and PAYE, and to let HMRC know if you are employing staff, while postal registration takes 8-10 days, though you can pay £100 and have your postal registration completed on the same day if you send it before 3pm and mark the envelope “same day service” in the top left hand corner). You’ll then receive a certificate of incorporation. Remember, you need to register for corporation tax within three months of starting to do business.
There you have it – starting your own private limited company is certainly much more straightforward than many people expect. Of course, it’s important to stay on top of your duties and responsibilities not just throughout the early days, but during the whole life of your business – including insurance, legal documentation and overheads. The latter can be made easier to manage through the use of adaptable arrangements such as flexible workspace. To find out more about this option, contact Signature Works today via 0151 558 1566.