First, we’ll quickly go through the basics. What is a private limited company by shares?
- It’s a separate legal entity to those running the business
- It will have separate financials to the owners
- It will have at least one share, and one shareholder.
- It gets to keep all of the profits made after tax
- It is the most common business format in the UK
Great, so we want one of those. How do we go about setting it up?
First, check if it’s the right decision for you. Understand all the different corporate structures and how they affect you as an owner. You can find out more in our article here.
Then choose a name. You don’t necessarily have to trade by this name, but it will have to be on all official documents.
Appoint a company director. This is compulsory, regardless of industry. You’ll need all the basic information about each director that you appoint. (Date of birth, nationality, email address, correspondence address, etc).
You’ll then have to decide on your shareholders and their shares in the business. Your shareholders can be your directors, if that makes sense for your company.
Next, they’ll ask for your memorandum of association (form 10) and articles of association (form 12). Companies house provide you with a standard set, that you can edit if you wish.
Once your set up
– Make sure you keep records of the company details. You’ll need to update your information on companies house if any changes are made. You will also need to release a statement of confirmation that will legally confirm all details each year.
– Ensure you keep detailed accounting records. You’ll need to keep records for at least 6 years. It is always beneficial to include receipts and invoices within your accounting software where you can so everything is kept in one place.
– Make sure you have an official company address. You can either pay an accountancy service to give you one, or you can make it your shop/office if applicable.
If you would like some help setting up or running your limited company, let us know! We are happy to help out. Contact us here.