Limited Company Checklist

We know how hard you work for your money. In fact, many contractors work in excess of 40 hours a week. So, it is only natural that you want to take the majority of this hard-earned money home.  

For most contractors, working through a limited company remains the most tax efficient way to operate. Incorporating a limited company can seem like a daunting task. However, with the help of an experienced contractor accountant (like us, for instance) the whole process can be handled in a matter of minutes, as long you have the correct information prepared in advance.

When you come to us to help you set up your limited company, you will need to have the following information available, so we can complete the process with Companies House:

Company name

Choosing a company name may not be as easy as it sounds. Firstly, it needs to be unique. The name you choose cannot be the same as another registered company. In cases where it is similar and if the other company complains, you may be asked to change it.

Secondly, your company represents you and your expertise, therefore the company name needs to be professional and not cause offence.

Once your business has been incorporated, you must include the word ‘Limited’ or ‘Ltd’ at the end of the name.  

Registered office

Every limited company must have a registered office address. You can use your home address, but as this information is available to the public, most contractors choose not to do so. Many companies choose to use the address of their accountant.

The registered office address is where all official communication from Companies House and HMRC will be sent, so the physical location must be secure.

HMRC state that the registered office address must be a physical address and must be in the country that your business is registered in. For example, if the business is registered in England, the registered office must also be in England.

Directors

When forming a limited company, you must appoint at least one person to be the director of the company. The majority of the time, this will be yourself.

Becoming a director of a limited company comes with certain responsibilities. These are explained further in our downloadable guide to contracting.

Ownership of the company is issued through shares. So, if you are the only director, you will not necessarily have 100% ownership of the company – you would need to own 100% of the shares, which would also mean you receive 100% of any dividends from the company.

Informing HMRC

Once the process with Companies House has been completed, you must inform HMRC within three months of starting any business activity that you have incorporated the business. You must provide information pertaining to the:

• Company’s name
• Company’s registration number
• Company’s start date
• Company’s registered office address
• Nature of the business you will be doing

VAT registration

It is not mandatory for you to register your business for VAT. However, if you expect your annual taxable turnover to exceed the VAT threshold (£85,000 for 2018/19) or if you expect your taxable turnover to exceed the threshold in the next 30 days then you must register for VAT.

We can advise you which VAT scheme will be the most appropriate for your business.

If you’re ready to start your contracting career, we can handle the administration that is involved in the setup and running of your limited company. Give us a call on 01962 867550 to find out about monthly accountancy packages.