If you want to build a successful business, first you have to learn how to legally establish your venture here in the UK. Prestige Tax and Trust Services explains how to set up a limited company.
Types of business
Increasingly, people across the UK are coming to recognise the benefits of starting a business. Figures quoted by ITPro suggest that a record 608,100 start-ups were launched across the country last year. Under UK law, there are several ways to establish a business in the UK.
- You can register as a sole trader; someone who completely owns their business and is entitled to all its profits (after tax), but is responsible for all its losses too.
- You can form a limited company; a business with multiple owners who share profits whose share of its debts are determine by the amount of capital they invested in the firm.
- You can run your venture as a business partnership; a single business where two or more people share ownership and each partner contributes to all aspects of the firm.
If you’re looking to establish a venture that has large growth potential, you may incur significant debts. In this case it would be more advantageous to set up a limited company, as this will lend you a measure of financial protection, but how you go about this?
In order to set up a private limited company you’ll need to ‘incorporate’ your venture by registering it with Companies House, the government department for business. To do this you’ll need:
- A company name and address.
- At least one company director and at least one shareholder.
- A memorandum of association; an initial agreement between shareholders (known as ‘subscribers’) to create the company.
- Articles of association; written rules which detail how the business should be operated.
- A statement of capital; details of the company’s shares and the rights attached to them.
If your business is limited by shares and has standard articles of association (also known as ‘model articles’) you can register online with Companies House. Alternately, you can use other forms of registration to set up a private limited company. After you’ve registered your company you’ll receive a ‘certificate of incorporation,’ which shows your company number and date of formation.
Prestige Tax and Trust Services
You may be just starting your business, but it always pays to think of the future. If you develop a lucrative venture, you’ll want to ensure it can support your loved ones after you die, so it’s vital you write a properly worded will. Prestige Tax and Trust Services has a business protection service you can utilise to ensure your company continues to provide for your loved ones after you’ve passed away.