10 key decisions when setting up a company
DESCRIPTION
Our newest presentation highlights 10 important questions you may ask yourself when considering the route of company formation. Company registration is a relatively easy process, but it can be confusing to an individual without experience. This presentation highlights 10 things for you to consider when you register a company. The presentation covers a number of aspects, from the decisions to be made during the company formation process; to other questions you need to ask with regards to your newly set up company. This guide will help leave any questions about limited companies and their requirements unanswered, ensuring you have all you need when you register a company. This, and other presentations, is brought t you by Wisteria Formations. Wisteria Formations is a leading company formation agent, backed by Wisteria Chartered Accountants. Register a company now for £24.99 at www.wisteriaformations.co.ukTRANSCRIPT
The process of company registration can bring out many questions for those new to business. We highlight some key things to consider.
10 KEY DECISIONS WHEN SETTING UP A COMPANY
1) WHAT TYPE OF BUSINESS?
Limited liability Separate legal entity Prestige But administrative
obligations (annual return and accounts).
Owner and the business are the same legal person (unlimited liability)
Often higher tax burden But lower administrative
requirements.
Private Limited Company (LTD):
Sole trader:
The first thing that those starting a business need to consider is which structure will be most suitable for their needs. The main structures in the UK for start-ups are:
For further advice on which structure is best for you, please visit our presentation on Sole Trader vs LTD.
2) WHAT IS THE COMPANY NAME?
There are a number of different factors that need to be taken into account when deciding on your company’s name. It is important to get it right at the start, because it requires filing to change it after company formation.
1. Is the name original? You can’t use the name of a company that already exists.
2. Does it contain any sensitive words? Companies House restrict the use of certain words in company names.
3. Trading names? Could you use any other names to trade under for different activities.
3) WHO ARE THE DIRECTORS?
The directors of the business are those that are in charge of making important business decisions. The directors must take responsibility and act properly to promote the success of the business.
Most people can be directors of a UK limited company, though there are restrictions on:
Under-16s Those who are un-discharged bankrupts Those who have been disqualified from
holding the office
4) SHOULD YOU APPOINT A COMPANY SECRETARY?
The office of company secretary is no longer a compulsory position at company formation.
The company secretary can be held by a director.
The secretary has varied responsibilities: statutory filings, convening and administrating meetings, updating the register.
The work completed the secretary may help to avoid incorrect/late filing penalties and fines.
5) HOW WILL YOU ISSUE SHARES? There are a number of important considerations when
deciding the share capital upon company registration...
Who?Individuals or companies can be shareholders – these will be
the legal owner of the business.
Rights?Should all shareholders have the same rights? Are all entitled
to vote? Should some have preference dividends?
What percentages? When deciding on the number of shares and shareholders to
have at company registration, it is important to consider the level of control you want to retain in the company. Some company decisions require 75% shareholder agreement.
6) WHERE TO HAVE YOUR REGISTERED OFFICE ADDRESS?All UK limited companies are required to register a
company address that is situated in the UK, known as the registered office. Although this can technically be the home address – many would prefer to used a registered office provider.
Some of the main factors to consider include: Are you happy having all post (including junk
mail) to your home? Or would you rather it sorted?
Are you happy with your home address appearing on the company’s public register?
Does your mortgage/rental agreement allow you to run a business from your address?
7) DO YOU NEED A BANK?
This question is quite simple to answer. Yes. All UK limited companies are legally required to keep their company and personal finances completely separate.
8) DO YOU NEED TO COMPLETE VAT REGISTRATION?
There is a legal requirement to register for VAT in the UK after a certain level of turnover.
The threshold for compulsory VAT registration in the UK is at taxable turnover of £73,000 in the past 12 months.
It is also possible to voluntarily register for VAT. This can give benefits such as allowing you to claim back VAT from suppliers that charge it; you can claim on costs of set-up; and there are image benefits.
9) DO YOU NEED TO REGISTER AS AN EMPLOYER (PAYE)?
PAYE is the system by which the UK government deducts Income Tax and National Insurance Contributions from salaries of employees.
The legal obligation to register for PAYE is associated with the level of salaries that your company is paying. If you are paying any employee (including directors) over a certain amount you will have to register.
10) DO YOU NEED AN ACCOUNTANT?
All limited companies have certain administrative obligations that they are required to complete, for Companies House and other government bodies. The two main obligations are:
The Annual Return Annual Accounts
It is important to consider the appointment of an accountant for your newly set up company, to help you complete these filings. For those without experience, professional advice can help avoid the incorrect filing of accounts, saving time and money.
W: http://www.wisteriaformations.co.uk
T: +44 (0)844 893 0808
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