Company Registration

A company registration in the UK is necessary for business that is to trade as a limited company. By this, we mean that a company is registering with Companies House which is the United Kingdom Registrar of Companies.  It is an Executive Agency of the Government, under the remit of the Department for Business, Innovation and Skills.

There are over 2.7 million company registrations according to the Companies House website. So why do business owners decide that a company registration is their preferred business structure?

Well here are three main advantages for company registration:
  • A company’s liability is limited and does not extend to the separate assets of its owners. These are known as shareholders. A company can have as many shareholders as it likes or just one shareholder.
  • The shares of a registered company are easily transferred. They can be bought and sold. A price can be agreed between the parties involved.  Shares can also be offered as a reward to employees, acting as an incentive to participate in the future success of the registered company.
  • If a shareholder dies, the existence of a company remains, unlike a partnership which is dissolved when one partner dies.  A company registration allows for the deceased owners of the company to pass on their holding, whilst the value of the viability of the company is allowed to continue.

If you want to know more abut the comparisons  between a company registration in the UK and other different bushiness formats, we discuss it here.

So if you decide that the right business format for your enterprise is to set up a limited company, then the process is made easy by using the services of Brookstand. We will manage your company registration on-line.  Just use the user friendly company registration service we have created to get your company name registration and ensure you are also set up with HMRC. This means you meet both your Companies House and Revenue and Customs requirements.

If you want more information, please leave a comment below and we will get back to you.

However, if you are ready to take the next step,  just follow this link and we will assist in taking you through the company registration process.

 

 

 

What are the options when you set up a company in the UK?

When you set up a company you will have to make a decision more or less straight away: should I set up a limited company?

The simplest business set up allows you to take all the business decisions and take all the risks and rewards yourself.

But when you are setting up a business, this simple structure may not be appropriate.  What about other people owning and managing your business? Do you want to limit your risks and liabilities in the business set up? Do you want to be able to spread the ownership and increase the investors either when set up a company or in the future?

So lets have a look at the main advantages of three of the most popular ways in which people set up a business:

Set  up a Sole Proprietorship
  • Simple and inexpensive to create and operate
  • Profit or loss is reported in the owner’s personal tax return
  • Owner is personally liable for business debts
  • Life of the business is restricted to the life of the owner
  • Limited potential for value creation
Set up a General Partnership
  • Simple and inexpensive to create and operate
  • Partners’ share of the profit or loss reported in personal tax returns
  • Potential for some value creation
  • Partners personally liable for business debts
  • The business is dissolved when a partner dies
  • Only partners can raise outside capital
Set up a Company which is Limited
  • Owners have limited personal liability of business debts
  • Some benefits (such as pensions) can be deducted as a business expense
  • Owners can share out the profit and could end paying less overall
  • Access to full range of outside capital
  • Business can live on after founder’s death
  • Potential for value creation
  • Separate taxable entity
  • More expensive
  • Owners must met legal requirements for stock registration, account filing and paperwork

So if you decide that the right business format for your enterprise is to setting up a limited company, then the process is made easy by using the services of Brookstand. We will manage setting up a company online for you. Just use the user friendly company setup service we have created to get your limited company set up and ensure you are also registered with HMRC. This means you meet both your Companies House and Revenue and Customs requirements.

If you want more information, please leave a comment below and we will get back to you.

However, if you are ready to take the next step, just follow this link and we will assist in taking you through the process to set up a company.

 

 

Why Set Up a Limited Company? The advantages of Company formation

 

UK businesses consist of sole traders, partnerships and companies – we give some thoughts as to whether Company Formation is the option for you.  There are also limited liability partnerships, companies limited by guarantee and other unusual beasts – but this blog looks only at the Limited Company.

 

We will look at the advantages and disadvantages that you will find to help you decide if it is right for you.

1.     Incorporating for Tax advantages?

 

Dividends and Salary – As the company’s shareholder/director you wear two caps – you get rewards for your hard work as an employee and also you get reward for your entrepreneurship as a shareholder.  This means you are able to split your income into salary and dividends which could generate large income tax and national insurance savings.

 

National Insurance – As the owner of a company you have more scope than many to undertake effective national insurance planning.

 

Corporation Tax – The Corporation Tax regime is lighter than income tax with most small owner managed companies paying corporation tax at a rate of 20%.

This compares with a 50% higher rate of income tax which is paid by sole traders and those people who belong to partnerships.

 

2.     Non tax reasons to Incorporate

 

Limited Liability Protection – Basically this means that a company’s shareholders cannot be sued by outsiders for the debts of the company as they are separate. Although cautious lenders and creditors may require personal guarantees, this could provide invaluable security in certain circumstances.

 

Borrowing Money – It is potentially easier as a company to raise additional finance for example by raising a floating charge of the company’s assets or by raising equity finance.

 

Enhanced Status – Trading as a company is often perceived to have more prestige than by trading in your own name.  People often have more faith when they see Limited in the company’s name even if in practice there is virtually no difference.

 

Flexibility of Ownership – New people can be easily brought into the ownership of a Limited company.  It also gives you the ability to separate ownership and management if that is attractive to you especially if you want to keep your stake in the business but not be involved in the day to day management.

 

Continuity – A Limited Company structure allows for a smooth exit from the business – the company can continue even if a company member retires, dies or simply wants to move on.

 

3.    And the drawbacks

 

Costs – There are set up and monthly costs for the company secretarial and accounting aspects but in most cases the tax savings should easily cover these extra fees.

 

Company Law – As a company director you will be subject toUK company law.

 

Reporting Requirements – You will need to file your annual accounts and returns with Companies House revealing certain of your trading results.

 

PAYE - this will be applicable to any employees of the company, so you will have to run a payroll and ensure the PAYE is paid over monthly to tax man.

 

 

 

But don’t let these issues cloud your judgement – the benefits of being a Limited Company can be quite considerable and Brookstand Ltd is perfectly placed to help you with these administrative burdens so carry on with your business!

 

Contact us for more help at mail@Brookstand.co.uk