February 15, 2015 So you have decided that you definitely want to setup a UK limited company – you have compared the tax savings of being a limited company vs a sole trader , you understand the non-tax differences of a limited company and you understand the key responsibilities of running a limited company, and you have now arrived at the final hurdle of actually setting up your company. Here are the next steps where we explain how to setup a limited company. First you need to check that your company name is available – you can search here. The above link will tell you if a company name is available but you should also do a google search to ensure your name doesn’t clash with any existing business names. You can also have a read of this page which outlines the rules for choosing a name. We are going to keep things simple here and assume you just want to setup a standard UK private limited company – there are other options such as a “public” limited company (usually for bigger companies) and a “limited by guarantee” company (usually for not for profits / membership clubs). Once you have chosen your company name you are ready to setup your company – you can do it yourself through companies house but we would recommend using a formation agent such as Companies Made Simple. The setup process is pretty simple, especially if you are just a one / two shareholder / director company like most people, the online formations agents will guide you through each step. You’ll need to select a registered office for your business – this is the home of the company to which all official documents and notices have to be sent by law. The registered office address can be anywhere in England, Wales, Scotland or Northern Ireland depending on where the company is registered (for example if the company is registered in Scotland then the registered office must be in Scotland). If you do not have an address to use for the registered office you can always pay for a registered office service, there are many companies that supply this service which can be handy if you want to have an official city office address, which can also look good to potential clients. The formations agent will supply you with a standard “Articles of Association” – you can use your own one but the standard one will be fine for most people – this document will outline the director’s powers, shareholder rights etc. You will need to decide on a share structure – if it is just a Limited Company for one Shareholder than you can simply setup 1 x £1 ordinary share but if there are to be multiple shareholders you will probably want to get some advice on this to decide what the different ownership percentages as well as rights are to be. Even in a simple situation of 1 shareholder we tend to recommend issuing 10 x £1 shares or even 100 x £1 shares to ensure there are sufficient shares in issue should you want to transfer some to your spouse in the future (for example). Remember you will need to pay money into your company for the value of the shares so don’t set the share capital too high. You will need to appoint a director, who can also be the shareholder. The directors are appointed by the shareholders to run the company so it is the directors who are responsible for the day to day running of the company and to ensure it is being run by the rules of uk company law and fulfilling it’s legislative filing and reporting requirements. Once your company is setup you will need to action the below key items: Bank account – you’ll need to setup a bank account in the name of the company Book-keeping – you’ll need to have a book-keeping system in place to control the finances of the business – we can highly recommend FreeAgent Accountant – we would recommend you consider appointing an accountant sooner rather than later – not only will they make sure you are compliant with all the HMRC and Companies Hose filing requirements, they’ll be able to offer you advice along the way which as making sure you are running your company in a tax efficient manner. We would also recommend that you read our guide about corporation tax which explains how tax works for limited companies.