How do I create my own limited company?

Creating a limited company may possibly be the easiest part of starting up a business, especially if a self employment idea with a low start up is important for you, as it can cost just a few pounds.

Creating a limited company may possibly be the easiest part of starting up a business, especially if a self employment idea with a low start up is important for you, as it can cost just a few pounds. Whether a limited company is what you need in the very first instance is another question and one which you need to look into, preferably with the help of an expert in business start up; most local Chambers of Commerce will be more than happy to help you decide and will give their advice for free. Most people looking to become self employed and work from home begin as sole traders, but if your business grows quickly or you have a large turnover because of the nature of your business, perhaps because you are a contractor passing on a lot of your income to staff or other freelancers, there are definite tax advantages to becoming a limited company.

You can create a limited company in a matter of minutes online and it will only cost a small sum of money, typically under £20. After you have filled in all the forms and paid online, your company will be live in just a few hours and you will officially be the director of your own limited company. There are many legal responsibilities linked to owning your own company like this and you must make yourself comfortable with everything you will need to do, because they are all requirements in law and you are the only person who will carry the can if you fail to file the paperwork as and when it becomes due, even if you have appointed a company secretary. Before you get to this point though, there are some things to be considered.

You will need to have a company address; if you are planning to move soon, then choose an address which is more stable, such as a parent’s home, as you will have to tell Companies House if anything changes such as address. This address is just the ‘registered’ address and there is no recourse against it, so it can be anywhere, as long as the resident agrees. Choose your company name with care, because this is something you will have to live and trade with. Depending on what sector your home based work lies in, you will have a whole host of names to choose from, but be careful that it isn’t too near that of a competitor and also that it is easy to spell and say. Look at it in the shape of a web address – do the letters when run together spell something you would rather they didn’t. This is a surprisingly common business start up mistake. When you have checked everything to do with your company image and are happy with it, just a quick online search will give you any number of websites which will help you register your limited company and so with a few clicks, you can be off on an exciting journey of being self employed and the director of your very own limited company.

Comments [3]

  • Anonymous says:

    We set up our company on line in under 30 minutes for £25. If you pay someone to do it you will not get much change if any from £500 (a lot when you are first setting up) and once they get you hooked then they will bombard you with things designed to worry you and get you to pay them ever more money to resolve when you don’t need to.
    There are so many organisations targeted at supporting new businesses and financed through the money you have already paid in tax that you should use them as much as possible. Talk to at least two and see which one best meets your needs and then go with them.
    Also be wary when talking to these groups as they often get their staff on secondment from accountancy and legal firms. These firms don’t do this out of the goodness of their hearts – they are looking for clients to charge fees to.
    Remember to ask to meet and talk to others they have helped – this gives you some idea about how good these advisers are. Remember just because they are not charging you directly it’s no reason to take shoddy service and poor treatment. You have already paid them through your taxes.
    Also look for those organisations giving you a free website for 2-3 years, the same with bank accounts.
    Running your own company isn’t an easy life, but you don’t have a boss to blame or to take a large cut of the profit from your work.

  • Anonymous says:

    I found this article to be a little misleading. I am an entrepreneur wanting to register my own limited company and from this, I gathered that the process of registering a limited company is simple when as a matter of fact it is not. There’s lots of research to be done and if, like me, you are not familiar with the technical terms, you end up having to consider paying someone to do it for you.

  • Anonymous says:

    Don’t forget when you set up your company that you must submit annual accounts to Companies House.

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