Practice No 6009

LIMITED COMPANIES

You can set up a private limited company to run your business. You must appoint director(s) and register it with Companies House (Incorporation). This is a straight-forward process and can be done online.

 

Once registered you’ll receive a ‘Certificate of Incorporation’. This confirms the company legally exists and shows the company number and date of formation. Make a note of this and keep the document safe, you may need to produce it for example when opening a business bank account.

 

On that subject you will be required to open a business bank account, you can’t use your sole-trader account or personal account.

 

You will need to prepare Year End Accounts for the Company and lodge them with Companies House (within 9 months of the Company Year End).

 

It’s important to realise right from the start that a limited company is its’ own legal entity, i.e it is separate from you and as a Director you have to act in the Company’s best interests, not your own.

 

As regards VAT and Employees, the same thresholds and rules apply as stated above for sole-traders, with one exception, a Director is automatically an employee (but has slightly different obligations to ordinary employees).

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