Setting up a limited company in the UK can appear to be a daunting task – but it needn’t be and we’re here to show you why. It might be a bit of a tongue twister but with proper preparation and planning, you can get your business up and running quickly and smoothly.
To help you, here’s our jargon-busting guide to setting up a limited company in the UK.
What is a limited company?
A limited company is a business owned by its shareholders who are not personally liable for any debts the company may incur. They have a limited liability, which means their personal assets are protected should the company struggle with debt.
Why set up a limited company?
There are lots of benefits to setting up a limited company:
- Limited liability: your personal assets are protected should the company end up in debt.
- Tax benefits: limited companies incur a lower rate of tax than individuals.
- Easier to raise finance: limited companies are considered more credible by lenders, making it easier to raise finance.
- Professional image: limited company status gives your business a more professional image. In essence, it helps your business look the business.
How to set up a limited company
Here are the steps to setting up a limited company:
- Choose a name for your company.
- Check with Companies House that the name is available (no two companies are allowed to have the exact same name in the UK).
- Register your company with Companies House. Once registered, you’ll receive your unique company number.
- Open a business bank account (you’ll need your company number).
- Hire an accountant.
- Make sure you invest in business insurance.
- Build your website.
- Start to market your business.
Cost of setting up a limited company
How much it costs you to set up a limited company depends on the services you use. The fee for incorporation can only cost around £10 but be prepared to pay around £200 for all the bits and pieces that come with registering your company with Companies House. And of course, you’ll need to budget for insurance, getting a website built, accountant fees and so on.
Here are our bonus tips for setting up a limited company to help you:
- Do your research: there are plenty of resources available to help you in setting up your limited company so, do your research and make sure you understand the process at the start.
- Be patient: it takes time to set up a limited company and won’t necessarily happen overnight
- Get professional help: if you’re not sure about any aspect of setting up a limited company, including tax liabilities, legalities, business advice and accounts management, always seek professional help. It’s much easier to get it right from the outset than try and fix something later on.
A limited company gives you the peace of mind that your personal assets are protected while you launch and grow your business. For more information or advice, get in touch with our team today.