Forming a limited company
Posted on 1st May 2016
Anyone who is considering operating their business as a Limited Company will have a number of questions to ask. There may be different reasons for setting up a Limited Company. For example, you may be starting up a business and deciding to operate as a Limited Company; or you may have been a sole trader for some time and now wish to transfer the business to a Limited Company.
How do I form a Limited Company?
The formation of a company on the Companies House website is the final ‘formal’ step of the decision process to form a company. The first question is to decide if there are financial benefits to forming a company (see below) rather than being a sole trader. Some of the later decision steps are detailed below.
We have a lot of experience with helping a prospective business owner through these steps and to address potential issues early in the process.
There are both commercial and tax reasons why you might wish to operate your business via a Limited Company.
Fuller Spurling can help guide you through the practical and tax planning thought processes which are relevant to your circumstances, so that you can set up your Limited Company in the best way, at the outset.
Once the decision has been made to form a company we can deal with the formation documents and processes at a packaged price so that you can have peace of mind knowing everything is set up correctly. All you need to do is check and sign a few documents.
Limited Company versus sole trader – am I better off?
The decision to form a limited company rather than become a sole trader is effected by a number of factors.
This has been the subject of another of our articles and we have helped many of our clients through this decision process by providing them with a financial basis for their decision in addition to the other pros and cons of forming a company rather than remaining as a sole trader.
What do I need to think about when forming a Limited Company?
Here are some of the decisions to be addressed when forming a company.
What is a registered office and where it can be?
What is a trading address and where it can be?
What is a service address for a director or shareholder for Companies House records?
Who will be the directors, their role in the company and their voting rights.
Voting shares and non voting shares and what rights they could be given.
How to allocate the shares to family members with the different classes.
What name should we give the company and is that available online? Or on social media? Or at Companies House?
To consider, most importantly, having a written shareholders agreement rather than set out details in the Articles of Association. This can help situations where someone dies or wants to exit the business and can set out details of how individuals may be rewarded by salary and/or dividends given the share classes in issue.
What would happen if additional shareholders came on board in future years.
Would you like help and advice in forming your Limited Company?
Tagged as: Company Formation
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