It can be a very exciting time, planning and setting up a new company. The thrill of being your own boss can be appealing to some. One of the first things you need to decide on when setting up a company, is the boring, but very necessary, structure of it.
Now while the internet is full of useful content and articles, the structure and setup of the business does require some investment of time to ensure your new company meets of all its legal requirements.
Using an established and reputable UK Company formation specialist may be the most suitable option for you, as you can feel confident that your business has been structured correctly. This doesn’t have to be a costly, time-consuming exercise, either.
Just a quick scan online show that there are business formation companies who can incorporate UK Limited, Public Limited Companies and Limited Liability Partnerships (LLPs) online within minutes. Do check, however, that their system directly interfaces with Companies House UK (this is the government entity which holds company details) and is fully compliant with the 2006 UK Companies Act.
What type of business do you want to set up?
By this I don’t mean would you want to set up a financial company like Wonga or a high-street food outlet. Before choosing your company type – which can include being a sole trader, a limited partnership, a limited liability partnership (LLP) or limited company – do look at the different types of structures available and the advantages and the disadvantages to each.
Again, this is something that you can seek advice on from a company formulation specialist, but it may also help you to do your own research too, so you can feel confident you have chosen the most appropriate business set up for you.
You can decide to go down the limited company route, for example, which can mean more paperwork but gives you much more personal financial protection for the future. The official government website has anumber of guide and pages to help you understand this type of structure. You can also read about the benefits of being alimited company provided by the HMRC (Her Majesty’s Customs and Excise).
Look at your options
The easiest way to set up a business is as a sole trader. Simply go to a bank and tell the HMRC you are working as self employed, and then just report your business activities and income via self assessment – this type of setup works well for smaller companies, such as one man band types.
You can also go down the limited company route which has a more complicated setup but can allow for many more company benefits such as less tax, and as touched on above, more personal financial protection. To prospective customers, being a limited company may look more professional – which may lead to a higher calibre of clients and income opportunities, as well as provide better access to funding, should you need it.
It should also be pointed out that you will need a separate business bank account no matter which way you decide to operate, to make accounting and reporting to the HMRC easier and keep the whole business legal in the eyes of the law. Do not think you can simple have monies paid to your personal bank account. That will be a bad way to start.
If you are going down the limited company route you will also need to research company names before settling on one. Don’t simply think that you can use your name as a company as that might be already in use. Your company formation specialist will be able to advise you on this as part of their service.
This article really is just trying to get you to think about the things that need to be considered carefully before making the leap into self employment or setting up your own company. So before you even consider designing logos and getting your business cards printed, ensure that your company is setup and structured in the right way for you.