Whether you are a sole trader setting up as a limited company or you’re setting up a brand new business, forming a limited company is an exciting time. But with so much going on, it can be tricky to keep track of everything and ensure you’re doing everything you need to. Read on to find out our five top tips for setting up a limited company.
1. Decide which type of limited company you need
Would you like to form a Private Limited Company (an LTD) or a Public Limited Company (PLC)? A PLC requires a minimum share capital of £50,000, at least two shareholders, two directors and a company secretary. If this doesn’t sound like what you want to set up, then an LTD is likely to be the way to go.
You may also need to consider whether your company will be limited by shares or limited by guarantee. Most companies are limited by shares and are owned by shareholders who want to make a profit. Companies limited by guarantee are owned by guarantors and are non-profit organisations or charities.
2. Choose a good company name
Your company name needs to be unique and stand the test of time. For example, if you’re currently serving customers within your hometown but hope to expand to other areas later, a geographical name may become problematic in the future. Remember that you’ll need to add “Limited” or “Ltd” to the end of your name unless you are setting up a limited by guarantee company.
If you’re interested in buying a vintage company, which has been registered with Companies House for a significant length of time, you can reap all the benefits of that company’s history and still change the name to whatever unique company name you choose.
3. Ensure all your information is accurate
When it comes to providing information for your limited company, you need to make sure that everything is completely correct. For example, check you have spelled the directors’ names correctly, that all dates of birth are correct, and that your registered address is an address within your chosen jurisdiction of corporation (England, Scotland, Wales or Northern Ireland). Some of these things can be difficult to change at a later date, so it’s easier to make sure it’s all correct the first time around.
4. Get organised – understand your legal obligations
In the early days of setting up your company there will be lots to do. Make sure you’re aware of everything you have to deal with and that you’re organised and ready to do it all in a timely manner. This may include:
- Displaying your company name, address, place of registration, registration number and VAT number on your website, email and letter correspondence, and any order forms
- Displaying your terms and conditions for customers to find easily – for example on your website
- Remembering to submit your confirmation statement and annual accounts to Companies House every year, and VAT returns to HMRC every quarter
- Making monthly PAYE and NI contributions
5. Get some help – set up your limited company with Paramount Company Formations
It’s easy to set up a limited company with Paramount, because we do all the hard work for you. Simply find the service you need on our website, enter your desired company name or choose an existing company, and complete the checkout process. Our company formations also come with a free business bank account – another thing you can easily tick off your to-do list.
Ready to become a limited company? Take a look at our company formation packages to find out more, or give us a call on 0800 0198 698.