Setting up a limited Company

Setting Up A Limited Company Article



An article by Drew Coles member of the Chartered Institute of Management Accountants


Limited Company set up

We get asked a lot of the time the steps to setting up a limited company. We thought it may be beneficial to write a short article which hopefully points you in the right direction to get started.

Planning

Step 1 - Everyone needs a plan

A business plan, everyone should have a plan. This doesn’t need to be overly complicated or technical. It just needs to have the most important points. Things that should be included are expected sales, Cost to produce the item or service, break-even point, fixed costs and growth over the next five to ten years. Try to create a Cashflow forecast to help control cash and include a simple profit and loss


Step 2 - Get Banking

Set up a separate bank account for your limited company. The company is separate from you personally so you must set up a bank account to track incoming and outgoing transactions, to pay suppliers and receive payments from customers.


Step 3 - Register the company

You should register your company at Companies house. This can be completed on the companies’ house website. At this point you should have already decided on the name. You will also need to complete the articles of association and shareholder forms on the website. Once registered you will be given your company registration number which should be included on your forms, company’s website etc

HMRC Logo

Step 4 - Mr Taxman

Register with HMRC. You will need to register on HMRC’s website for corporation Tax for the business. This should be done now rather than later to ensure no delays and fees. At this point the shareholders of the business should also register with HMRC for self-Assessment purposes to declare dividends.

Step 5 – Get great Accounting software

Great Accounting software makes your life easier when running your business so pick one that connects to the cloud so you can work seamlessly with your Accountant, connects to your bank account for easy reconciliations and gets you great reports to base your decisions. Again, this should be done before any transactions have happened so there are no missing transactions at year end.

Companies House
Step 6 - Start Trading

You can now start trading and you have a made a great base to create your business. Just remember to keep all your business receipts, invoices and bank statements for year end and remember to contact us if you need any help.