subject: How To Form A Start Up Business In The United Kingdom [print this page] How To Form A Start Up Business In The United Kingdom
When forming a new company a decision has to be made as to how to set it up initally as a limited company or as a sole trader or partnership. Sole trader and partnership A sole trader or partnership is a simple way to get going and you can change to a limited company as your situation changes. All you need to do is inform the right government departments that you are now going self-employed and you can start immediately unless you need a licence for what you are doing. As a sole trader you are liable in the unlikely event something happens, you have overall power with the company and so would have fewer worries and concerns to do with the red tape that goes on. This means you have no need to register with companies house and have fewer account requirements that limited companies have. However you will still need to do your accounting correctly. You have a little bit more work to do with limited company formations but this does have its own rewards. This is should anything go wrong then the company finances are separate to the personal finances, this would mean that any debt the company has would not be the direct responsibility for the shareholders but they may be asked to guarantee any loans or credit. For UK company formations and to register as a limited liability company you must perform the following: Register the company with companies house. The annual accounts must be filled with companies house. The annual return to companies house be filled which updates certain details about the company. You must inform HMRC of any profit or taxable income within a companies year. You must complete and return the corporation tax form and pay any tax due within 9 months of the company year end every year. Anyone who is employed by the company must be paying the correct amount of national insurance and income tax on their earnings. Some people choose to use an intermediary to fill in the documents that are needed for submission to companies house when they form a company. The documents that you need to submit are detailed below and if needed you should seek appropriate help should you need it. 1. Memorandum of Association - this defines the core company details like name, location and type of business. 2. Articles of Association - this details the power of the directors and rights of the shareholders etc. 3. Form IN01 - this details the companies registered offices and the if applicable company secretary and the director(s). The share capital if limited by shares or the subscribers. The forms may be prepared by private firms specialising in setting up of companies or can use your accountants, the law does not state you must use and agency but strongly advised if never been performed before.
