The cost of establishing a limited company
Starting a private limited company can be surprisingly quick and straightforward compared to the process of starting a business itself. Depending on the method you choose, you can register a limited company within 24 hours and at a lower cost than an average take-away dinner.
There are three options for setting up a limited company: do it yourself through Companies House, use a third-party agent, or hire an accountant. Each option has different processing times and fees, so continue reading to find the best choice for you.
How much does it cost to register a company if I do it myself?Companies House has simplified the registration process for limited companies, whether it's done online or through mail.
For private limited companies, you can register your business online for a mere £12 if you meet the following criteria:
- Provide all the necessary information for setup
- Establish the company as limited by shares
- Adopt standard articles of association
You will need to complete form IN01, which asks for details about the directors, shareholders, and registered address. After submitting the registration fee via debit card, credit card, or PayPal, your company will be registered within 24 hours.
For public or private limited companies, you can register by mail. The options are £40 for an 8-10-day processing time, or £100 for same-day service. Payment must be made by check, payable to Companies House.
What do I need to set up a limited company?Several requirements must be met when establishing your limited company.
If you are forming a private limited company, you'll need a registered name. There are some guidelines to follow: the name cannot be already registered, it must not be offensive, and it should typically include the word "limited."
There are exceptions where you don't have to include "limited," such as when your articles of association prohibit payment to shareholders. Additionally, if you want to trade under a different name from your registered company name (which is allowed), your trading name must not contain "limited."
If you ever wish to change your registration name, Companies House charges an £8 fee for online changes or £10 for changes by mail.
A Memorandum of Association
This document is only needed if you register by mail. If you register online, it will be automatically generated as part of the registration process.
The Memorandum of Association is a legal statement signed by all initial shareholders or guarantors, indicating their agreement to establish the company. It includes the new limited company name, location, and business type. Online templates are available to assist you, and for the business type, you'll select a Standard Industrial Classification (SIC) code from Companies House's provided list.
It's important to note that you cannot modify the memorandum once the company is registered.
Form IN01, which can be completed online or on paper, requests various details about yourself, shareholders, and directors. This information may include:
- Place of birth
- Telephone number
- National Insurance number
- Passport number
- Address/registered limited company address
If you don't have a company address yet, don't worry. You can use a personal address. HMRC and Companies House simply require a location for legal correspondence.
You'll also need to confirm that your limited company adheres to the terms and conditions of the Companies Act.
This is an official legal document containing written regulations that outline the entitlements and authority of the shareholders and directors of the company. It is possible to utilize standard articles, also referred to as model articles, which are the predetermined set of regulations established by the Companies Act 2006. Alternatively, you have the option to create and submit your own articles with the assistance of a legal consultant.
What is the cost associated with setting up a company with an accountant?If you are new to this process, having the support of an accountant can provide a significant boost of confidence. They will assist you in completing all the necessary paperwork and can also offer guidance on the subsequent steps to take.
Once you have successfully registered with Companies House, there are various statutory obligations that you must fulfill. Your accountant can help you comprehend these obligations and ensure that you accurately and punctually submit all your financial accounts to maintain compliance.
In some cases, an accountant may establish your limited company free of charge, particularly if you sign up for their monthly services. However, if not, there will be a one-time fee which can vary depending on the level of involvement you desire. If you are considering engaging an accountant, here is a general overview of the expenses associated with their services.
What occurs after the registration of my limited company?Upon successful registration, you will receive a Certificate of Incorporation. This document serves as proof that your company is legally established and displays the company name as well as the formation date.
Registering online offers the additional advantage of automatic registration for Corporation Tax. However, if you registered through post or with the assistance of a formation agent, you must separately register for Corporation Tax within three months of commencing business.
What are the additional expenses involved in operating a limited company?Following the initial registration, the next essential aspect to remember is the annual Confirmation Statement. This statement must be filed every year to confirm that the details of your company with Companies House are up to date. The online filing fee is £13, while the fee for filing by post is £40.
In addition to these fees, the costs associated with running a limited company encompass general expenses such as rent, utilities, wages, digital marketing assets, accountant fees, insurance, and more. The total cost of these expenditures will vary depending on your business and its specific needs.
If, for any reason, you need to re-register your company, you can do so by post for a fee of £20, or opt for the same-day service at a cost of £50.
Your accountant will assist you in managing all the immediate and ongoing costs associated with running a limited company.
If you found this article beneficial, you may also find our informative article on purchasing the shares of a business partner or shareholder worth reading.
If you would like to speak with an accountant, click here to be matched with one.
If you find yourself in the position of wanting to hang pictures or a new TV and you desire to add some wall decor to create a more unified and finished look in your room, it is important to consider the preparations required before taking up that hammer.In order to securely hang any heavy items such as
Last updated: 07:06 EDT, 18 May 2021Critics of the television program How to Save a Grand in 24 Hours have strongly criticized a mother who spent £300 per month on beauty products but claimed she couldn't afford to remedy the black mold that was growing in her son's bedroom.Anna Wallace, hailing from
Learn how to stream the latest drama, 'No Return,' starring Sheridan Smith. Looking to watch the captivating holiday drama, No Return, online? Discover where you can find the thrilling series.Strongly following the journey of Kathy (Sheridan Smith) and Martin Powell (Michael Jibson), a married couple
If you're interested in scheduling a doctor's appointment using the myGP app, you'll need to follow these steps on your smartphone:1. Input your mobile number and date of birth. It's important to note that this must be the mobile number you provided when registering at your GP surgery.2. Conduct a