Starting a limited company in the UK is an admired choice for entrepreneurs looking for a formal business form that provides a limited liability, potential tax benefits as well a professional image.
However, it is important to know the legal requirements, costs, as well, and steps included in raising a limited company in 2024.
This guide explores everything about what are the requirements for a limited company in the UK, right from registration to costs, as well as answers the key question such as whether one person can structure a limited company.
Requirements for a Limited Company
How to register a limited company in the UK?
Registering a limited company in the UK is a simple process yet it includes various key steps to make sure that a company is legally cooperative and set up your company for success.
Choose a unique name for the company:
- Registering a company starts with selecting a company name that is unique and not already in use. You must check the availability of the name you select.
- Make sure that the company name matches with regulations, avoid restricted words as well, and make sure that it ends with Limited or Ltd.
- Must check on registering the domain name which compatible with your website to boost your brand online.
Your company must have a registered office address:
- The company must be registered with an office address in the UK where an official resemblance will sent. This address will be listed on the website as a company’s house register.
- Registered office must be your home address, your business premises, or a third-party provider serving registered office services.
Decide shareholder and share structure:
- Your company must have at least one shareholder, who can be a director also. Shareholders own a company as well as they have the right to vote on essential matters and receive dividends as well.
- Setting up the total value of shares as well as several shares to be issued. the minimum capital of share can be as low as £1.
Prepare for essential documents:
- Must prepare an essential document that confirms the intention of the initial shareholders to structure the company.
- It is a standard document that you need to submit which is included in the registration process.
- These are some sets of rules that govern how your company will be run. You can use the standard model article as well as you can create custom article designs according to your business requirements.
Register through the Companies House:
- The fastest way to register is online with the Companies House website. The fee to register websites is £12, and the process often takes about 24 hours.
- If you think preferable you can register by post using form IN01. This method costs £40 and takes 8-10 days.
- You will required to offer the details about the company’s directors, shareholders, registered office, as well as share capital. You will also be required to submit a Memorandum and Article of Association.
Receive the certificate of incorporation:
- You will receive a certificate of incorporation once your application is approved. his certificate confirms that the company legally exists as well and it includes a company number and date of incorporation.
Register for corporation tax:
- After receiving a certificate of incorporation, you should register a company for corporation tax with HMRC. This should be done within three months of starting of starting your business.
- You will be required to submit annual corporation tax returns as well as pay any taxes due within nine months and also one day after the company’s accounting period ends.
Set up a bank account for your business:
- It is necessary to open a separate business bank account to keep the company’s finances decide from your finances.
- To open a business bank account, you will require your certificate of incorporation, identity proof of the directors, as well as possibly the articles of association.
Register for VAT if applicable for your company:
- If your company’s taxable turnover, exceeds £85,000 in 12 months, you must register for VAT with HMRC. You can also register freely if your turnover is below this threshold.
- Once registered you will be required to submit regular VAT returns often every quarter.
Adhere to other legal obligations:
- If your company handles personal data, you need to register with the information commissioner’s officer or ICO and agree with GDPR.
- If you plan to hire an employee, you will be required to register as an employer with HMRC, set up a payroll system also agree with employment laws.
How much does it cost to set up a limited company in the UK?
Setting up a limited company in the UK is relatively affordable. The primary cost is the registration fee with Companies House, which is £12 if done online and £40 if done by post.
However, there may be costs associated with hiring a company formation agent or solicitor if you choose to seek professional assistance.
Optional costs could include purchasing a registered office address service, creating a custom article of association, and setting up a business bank account, which might have associated fees depending on the provider.
Can one person be a limited company?
Yes, one person can form a limited company in the UK. You can be the sole director and shareholder, making it possible to own and manage the company by yourself. This structure is known as a single-member company.
Despite being the only person involved, the company is still a separate legal entity, meaning your assets are protected from business liabilities.
Conclusion:
Registering a limited company in the UK is a straightforward process that can be completed in just a few steps, with minimal costs involved.
The flexibility of the UK’s legal framework allows even a single person to form and run a limited company, making it an attractive option for solo entrepreneurs.
By understanding the requirements and following the correct procedures, you can establish a limited company that provides both professional and financial benefits, setting your business up for long-term success.
