Hello all!
Limited Companies have quite a few benefits, besides the directors having a limited liability, they are effectively their own entity.

Anyway, my question is, did you hire a firm to form your company or did you do it yourself/in house. When I was looking around for firms they came back with prices up to £500 whereas the Companies House costs are £25 (or £50 for same day I believe).

I guess another point would be, do you believe it was worth you forming a Ltd. company?

Thoughts?
Mike

My views and experiences about the whole limited issue is that if your business is growing well then go Ltd. Also why pay somebody money when you can just get the forms from companies house fill them in and job done.

Ltd has many benefits like if you borrow money, go bankrupt its the company's assests the receivers go for and not yours.

:)

Another route is LLP its cheaper and if you want it done externally its about £95 however save yourself some money and just fill in some forms. About 15 minutes work.

We used a company called Formations Direct (http://www.formationsdirect.com/) to form our company. A little more expensive than Companies House but a lot less hassle, and a lot less than £500.

Gavin

at the recommendation of my retiring accountant, we used:

http://www.smartcompanyformations.co.uk/

We recently spun off a sub company into its own entity and i did it myself, it wasn't actually that difficulty.

Both of those websites are a lot less than £500 :O. That's why WHT is the greatest place on the internet :D

we aim to please ;)

We used a formation company, probably the easiest route to take.

Used a formations company, only cost about £50-60 in the end I think.

One thing I would say - look out for a low headline price and extra 'hidden' charges.

Remember that these companies come with standardised articles of association. That's fine if you own the company 100% but if you have other sharedholders I'd suggest getting your lawyer to review the articles with you and draw up a separate shareholders agreement.

or your accountant if you have one.

or your accountant if you have one.

Indeed, we just used our accountant.

The accountant is the best choice to create your company.

Actually your "lawyer" is by far the best bet, but just registering a company is not hard and an accountant could do it and there are lots of formation agents also.

Just remember that there is much more to running a company than just getting it registered.Taxes, legal obligations to name but a few.

I used company wizard to form mine, and it only cost me £40ish after VAT etc. Was done within 4 hours. Absolutely brilliant service.

Once you've formed, you've got to notify Companies house of who will be managing your books (Accountant) otherwise there is a fine from what I believe.

You would only have to tell Companies House who was managing your books if you were VAT registered. Which costs around £6k per month. I believe this is what you are talking about in terms of tax? If you aren't VAT registered you just pay VAT like everyone else and that is your tax.

There would also be an increase in Council tax but only if you are renting an office or solely using a premises for business.

Mike

You would only have to tell Companies House who was managing your books if you were VAT registered. Which costs around £6k per month. I believe this is what you are talking about in terms of tax?
Alot of incorrect information being put about here.

You have to inform HMRC http://www.hmrc.gov.uk/ when your company starts trading or face a fine. you will also have to complete a corportation tax return annually.

You have to file accounts annually at companies house in the correct format or be fined.

Becoming VAT registered costs nothing. However you will have to submit VAT returns every 3 months. You must become VAT registered once your sales go over the threashold which is around 60k/year.

I recommend using an accountant as they will be able to advise you and probably save you alot of money, theres some very tax efficent ways of using a limited company.

I stand corrected then :) thanks for the info. Although that is why I started the thread :D

Although, as for being VAT registered, you do have to pay the VAT from your products in tax. So it's not free... :P

I stand corrected then :) thanks for the info. Although that is why I started the thread :D

Although, as for being VAT registered, you do have to pay the VAT from your products in tax. So it's not free... :P
Well thats only if you sell anything :P
And you can also reclaim the VAT on any purchases so it works both ways...

We used a formations company (http://www.uk-plc.net/companyformation/) basic package which was ideal.

As a Limited Company you'll need to submit your accounts return to Companies House each year (they have a set format they like). It's probably best to get an accountant to do this - their fee will be anything from £500 upwards. If you're late filing the accounts, you'll get a fine from Companies House (starting at £100 and increasing the longer you're late).

You'll also need to submit an annual return to Companies House which costs around £15 online if I remember (our accountant handles it for us).

Lastly, there's the corporation tax return. I think you're liable for tax on any profit over 10K but that might have changed. Again your accountant should handle all that for you.

If you've got employees you'll need your accountant to sort out the NI and PAYE returns, and directors will have a P11D form if you have any director benefits to declare.

VAT rules as above - once your turnover (not profit) is over £60K per year. Remember there are EU VAT rules too so make sure your online billing handles all of that for you so you correctly charge VAT to EU clients!

Also remember that anyone (at least in the UK) can search Companies House and get a copy of your last set of accounts and annual return (for a fee). They are a matter of public record.

As mentioned above, the company is a completely separate entity with its own assets and liabilities. You'll need to carefully separate what is yours and the companies, especially if you work from a home office. Eg the PC - is it yours, or the companies. If it's yours, are you leasing it to the company for a fee? etc. All has tax and VAT implications...


There's a lot more to becoming a ltd company than just a £25-50 setup fee.


On the plus side, many clients like to deal with a Ltd company and there are tax and liability advantages too.

Thanks for all the replies. It's always good to pick other people's brains :P

we have big brains, well they do :)

Accountants are usually able to offer similar advice to what a lawyer would offer. When I was doing my Company Law and Liquidation course for my degree around 45% of the students were trainee accountants.

I've started a few companies for a number of clients, but it's not something I enjoy.

Lastly, there's the corporation tax return. I think you're liable for tax on any profit over 10K but that might have changed. Again your accountant should handle all that for you.


As far as I'm aware, this was abolished last year. Tax is now payable on everything, even 1p profit.

Despite having half a dozen accountants in the close family and spending months looking at this before incorporating and after - I still didn't trust myself and fully recommend the suggestion of an accountant to take care of most things! Makes it far easier :)

That said, the PAYE and end of year stuff for employees is fairly simple - the online HMRC systems are pretty good for those.

One site I have found quite useful lately for some practical aspects - e.g. accounting software, best business bank account, merchant accounts - is http://www.ukbusinessforums.co.uk/forums/. Well worth a read :agree: