How do I set up a Limited Company?

Assuming you’ve decided to set up a new company, how do you go about it?  If you’re still making up your mind, please check out this article or get in touch.

Setting up your own company is surprisingly easy to do. In fact, I don't offer this as a standalone service as it makes far more sense for people to do it themselves.

However, this is not the case for those of you who wish to create Community Interest Companies (CIC’s) or have bespoke constitutions - I'm afraid you’ll have more work to do.

Strictly speaking, you only need to do number 3 of the steps below to create a new company.  However, I’ve included other areas that you should perhaps consider if you want to get off on the right foot:

1) Your Company's Name

This is the trickiest part, especially if you wish to future-proof. This video might help get you started.

There are certain restrictions as to what you can call your company. One of the main hurdles is selecting a name that hasn’t been used. Here’s a tool to check for available names

Often people set up companies just to protect a name they might wish to use in the future. These are known as Dormant Companies.

In some cases, companies use a “trading as” which might suit their service better than the legal name they register with Companies House.

2) Do You Need a Domain Name?

At this point, you might also want to see if the domain name is available. This can ensure that the web address, email addresses, and company name are all aligned.

If you do, try and register the company and the domain name at the same time. It’s not unheard of for a related domain name to be suddenly purchased when a company is registered!

3) Registering Your Company with Companies House

This is surprisingly quick to do online from the Companies House website. Here’s the link

You’ll need your company’s:

  • Name

  • Address

  • Business activity – you’ll need to pick up to 4 Standard Industrial Classification (SIC) codes. Here’s a list.

You’ll also need to know:

  • The Directors (at least one)

  • The Shareholders (at least one)

  • Details of the shares and shareholdings

  • Who the Persons of Significant Control (PSC) are. Normally those with more than 25% of the shareholding

This might seem like a lot when written down but is quite quick to do.

Please bear in mind that this is only for a standard company limited by shares. Get in touch if you are unclear if this is what you require.

4) Setting Up a Business Bank Account

As a company is considered a separate legal entity to the owners, it needs to have its own bank account. This might take a while to set up so worth doing before you wish to start taking payments. Here’s an article with some thoughts on what bank account to choose.

If you are setting up a dormant company, I’d advise you miss this step for now. Receiving bank interest is considered a significant transaction and would mean you’d have to compile annual accounts rather than the much-simplified dormant accounts.

5) What About Your Brand?

Once you’ve created your business you’ll want to share it with the world. Branding is a key part of your business’ identity. It should be at the core of what you do, so definitely something to consider at the very outset. Here's a good place to start exploring this vast topic.

6) What Insurance Do You Need?

A key consideration before you start doing anything is insurance.

Here’s a handy guide to give you an idea of what you need to consider.

7) Registering with HMRC

Once you start trading you’ll have to let HMRC know within 3 months. Here the link

Before you do this, you'll need your UTR (unique tax number). This should be posted to your registered address within 10 working days of registering your company with Companies House.

There are 3 main types of tax you're likely to have to deal with and you’ll need to register separately for each one:

  • PAYE
  • Corporation Tax
  • VAT

8) Taking Control of your Accounts

You’ll need some way of raising invoices and recording your expenditure. Apart from compliance reasons, this can really help you stay in control of your business. At the very least -  just remember to keep hold of all your receipts and mileages.

Certainly, this is something that’s best to consider from the start. Book a call if you'd like to discuss this more.

Good luck with your new venture!