Using a limited company can be extremely advantageous if you’re running your own business, whether you’re trying to protect your assets in case of liability issues or simply want to shield your profits from taxes.
A person setting up a limited company is a great way to get started in the business. It can be done quickly, and you have the flexibility to choose how your company will be run. However, there are some important things that you need to know before starting your own company as well as some things that might not be so straightforward!
What is a limited company?
A limited company is a separate legal entity from its shareholders. The shareholders are responsible for all of the company's debts, but they don't own any of the assets. Limited companies are taxed at corporation tax rates.
There can be more than one shareholder in a limited company and it doesn't have to have any directors at all although there may be reasons why you want to keep things simple. If you want to set up your own business, then this will depend on what kind of business entity best suits your needs.
The main point here is that if you're going into business with other people then setting up a limited company will give them protection against liability claims from each other or even yourself!
You are setting up a limited company
A limited company is a legal entity created by the filing of a limited company agreement with Companies House. The company is formed by shareholders and directors, who are responsible for its business activities.
A limited company has two main differences from other types of organizations. It has no unlimited liability and it has limited liability. With unlimited liability, if you run your business badly or fail to pay your bills, then everyone else's assets could be seized to pay off any debts owed by the company (or individuals).
This is called 'discharge' in law terms, so if someone gets into debt with their bank because they signed up for credit cards for them to buy coffee beans from Costa Coffee every morning then those debts would be discharged upon bankruptcy rather than just being wiped away completely!
You will need to appoint at least one director
You will need to appoint at least one director. If you are setting up a company with a partner, the two of you will be regarded as joint directors and should appoint each other as directors. If you are setting up your own limited company, then there is no reason why it should not be owned by just one person - this person becomes the sole director of their own company and has full control over its affairs.
However, if there is more than one owner in a limited company, then each owner can appoint another person (or persons) as "alternate" directors who have only limited powers under law but may attend meetings and take part in discussions about how decisions are made within the organization.
You will need a registered office
You will need a registered office. A registered office is where you’re officially based, and it has to be different from your home address. It can be any place in the UK (or another country), but it must have either been a place of business or residence for at least three years before setting up your company.
To set up a company with just one person or two people, all you need is an address that’s suitable for both of them. For example, John Smith and Jane Smith might live at 123 High Street, Sydney. They could also use their flat numbers as their registered offices if they wanted to keep costs down.
You must have rules for how the company is run
The rules for how your company is run are the same as a constitution. They must be signed by directors and shareholders, kept at the registered office, and changed at any time. If you decide to set up a limited company, you need to check that there isn't already an existing one with similar aims and objectives.
This could confuse later on down the line if they have different names or addresses between them. If you think this might be an issue then it's best practice to check with the tax authority before making any final decisions about what type of business structure would suit best in order not only to maintain transparency but also avoid problems further down the line when trying to find out where exactly those details should go!
Your company must have a Companies House number
Your company must have a Companies House number. You can request this online and it will cost $10, but if you don't pay the fee straightaway, you'll need to go into a branch of the Register Office in person and show them your passport or driving license details.
You will also need to provide your name, address, and date of birth at this stage, this is so that they can confirm that you are who say you are and not someone else.
The company name you choose must not already exist
As with all things, there are rules about how to set up a limited company and what your business name should be. You can't use a name that is already in use by another company, nor can you use one too similar to an existing trademarked or registered trademark. There's also no point in using something like "The Boring Company" because it won't be very memorable!
It is highly recommended that you use an accountant
It is highly recommended that you use an accountant when setting up a limited company. Accountants are experts in the field of limited companies and can help you with all aspects of setting up a limited company. They will be able to advise on all aspects of bookkeeping, VAT returns, tax planning and forecasting as well as business planning and forecasting.
Get professional help
If you are not sure about the legal requirements, it is best to get professional help. If you don't want to set up a limited company, there are other options available. You may be able to use one of these options instead.
A limited liability partnership (LLP). This type of company is more like an LLP than a limited company since it does not allow for shareholders (individuals or companies) but instead offers protection from creditors and investors in case something goes wrong with your business's finances.
It also offers fewer rights than being part of an LLP would give you as an individual member, for example, if someone buys shares from another member then they won't automatically get shares themselves unless they want those rights too!
We hope this guide has been helpful in planning your next business venture. Remember, it’s not only about the legal side of things, getting your business off the ground takes time and effort. However, if you follow our advice we can help you get there faster and easier with less stress and hassle in setting up your limited company.