Limited companies
Set up: The company needs to be registered (incorporated) at Companies House. At least one director plus a company secretary need to be appointed who may also be shareholders. An accounting year end date needs to be selected.
Accounting records: Annual accounts must be filed with Companies House. An annual return confirming statutory details will be sent each year prior to the anniversary of incorporation. This must be checked, amended and returned with a small filing fee.
The directors and secretary are responsible for notifying Companies House of any changes in management or structure.
Profits: Any residual profits after tax may be distributed to shareholders in the form of dividends or retained in the company.
Tax & National Insurance: Company profits are subject to corporation tax which is calculated on profits after deduction of directors' and other employees' remuneration. Company directors are employees of the company and their salaries are subject to income tax and Class 1 National Insurance.
VAT: If the company's turnover exceeds the registration threshold, it must register for VAT. Alternatively it can register voluntarily. See VAT page for more detail.
Liability: Shareholders' liability is limited to the value paid for shares and as such they are not personally responsible for the company's debts, but directors may be asked to guarantee loans to the company.
Business stationery: Business stationery must include the following:
• Registered name of company
• Company registration number
• Registered office address
• Trading address (if different)
• Place of registration (e.g. England & Wales)
• VAT registration number if appropriate (invoices only)
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