Longevity Website

When forming a new company you have to decide if youre going to initially be a sole trader / partnership or form a limited company.

As a Sole trader

Forming as a sole trade is the easiest way to start and can change to a limited company as your situation changes You just need to inform the correct goverment departments that your now self-employed and you can then start immediately unless you have to be licensed for what you do.

Working as a sole trader you would be liable if anything should go wrong, but you have overall control of your company and dont have to worry about as much of the red tape that goes on, this means you have no need to register with companies hour and have fewer account requirements that limited companies have, but this does not mean you dont have to do any accounting at all.

You have a little bit more work to do with limited company formations but this does have its own rewards. Should in the unlikely event it all go wrong then the companies finances are separate to any personal finances, this would mean that any debt the company has would not be the direct responsibility for the shareholders but they may be asked to guarantee any loans or credit.

In the UK, for UK company formations in order to register a limited liability company you must complete these:

Have your company register with companies house.

File annual accounts with companies house.

An annual return to companies house must be filled which updates some details about the company. Inform HMRC of any profit or taxable income within a company year.

Complete and return a corporation tax form and pay any tax due with 9 months of the company year end every year.

All those employed by the company must pay the correct amount of income tax and national insurance on their earnings.

Many people use an intermediary to fill the documentation that is needed to be submitted to companies house when they form the company. The documents that you need to submit are detailed below and if needed should seek appropriate help should you need it.

1. Memorandum of Association Sets out the core company information like name, location and the nature of the business.

2. Articles of Association Which contains details of each Directors power, shareholders rights etc.

3. Form IN01 This sets the Companies registered offices, details of the company Secretary, and Director(s). Also the subscribers and if limited by shares, details of share capital.

These forms can be prepared by a company specialising in setting up of companies or your accountants can, there is nothing in law that states you must use an agency but is best if you have never done it.