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In this article, we will try to provide a brief and simple look into the process of setting up a company, hoping to clarify the steps for those interested.
CHAPTERS
➤ Early stage
➤ Choosing a name
➤ Company registration
➤ Bank account
➤ VAT registration
➤ Employer registration
➤ Accounting affairs
➤ Essential responsibilities for directors
➤ Total cost
Early stage
Many may suggest that choosing a name should be the first step in setting your company up. We, however, suggest that you first ask; are you sure that this is what you are looking for? Is setting up a company in England the right thing for you in terms of market and taxation?
Other than the basic market research, it is important that you are aware of any tax issues related to such a decision, not only in technical terms of company and administration taxes but also in fundamental terms of regulations.
The assumption that a company registered in England will only be taxed in England is incorrect. This may be the rule but there are exceptions, as those found in the double taxation treaties between the UK and the country where your company’s management and decision taking is located. Additional and in depth information can be found on GOV.UK, in the International Manual.
Click here for a previous relevant article.
Choosing a name
Once you have the answers to the above questions, you can proceed with choosing a name for your company and you need to check if this already exists on the Companies House data basis. You can do this easily online.
Company registration
Registering your company is easy when there are no special provisions in the article of association. All you need to do is log on and fill in the relevant online form on GOV.UK.The formation fee is £12 and you’ll need at least 3 pieces of personal information about yourself and your shareholders or guarantors, for example:
town of birth
mother’s maiden name
father’s first name
telephone number
national insurance number
passport number
You can register a home address as your company’s registered business address. If you do not have a registered business address, you can buy one.
Bank account
You can have the account in any bank in any part of the world. However, with UK banks a few minor issues may arise if the director of the company is not a UK resident.
This is mainly due to UK banks trying to follow as closely as possible EU regulations regarding money laundry and avoiding tax evasion from EU citizens through “ground-breaking” companies. This is a major issue and its preferable to be presented in detail in a future article.
HSBC is one of the friendliest UK banks for non-UK residents and its website provides detailed guidance to opening an account. If you have any issues with this option, it is recommended that you seek help from experts and professionals.
VAT registration
In general, currently, if the annual turnover of the company is less than £85,000, you are not required to register for VAT. However, there are special cases as well as exceptions where this is mandatory. For details, please speak to your accountant.
VAT registration is also a good option in terms of marketing or company status, since many organisations favor VAT registered companies over those with no VAT.
Please note that VAT is a complicated area and it is strongly recommended to seek for professional advises.
Employer registration
Even if you are the only member (owner/director), you are still considered a company employee. This means that if you receive a salary from a company, your company must be registered in the register of employers and comply with the requirements of UK labor law.
If the director(s) does not have NINo, you cannot register online. Instead, you have to contact the registration department either via telephone or by post.
Professional guidance is highly recommended as this is also a very complicated area with strict management deadlines.
Accounting affairs
It's the alphabet of a business. If you do not know it and the laws that govern it, you are in absolute darkness and certainly at some stage of your business you will experience problems.
You are not bound by law to have an accountant and you can run your accounts any way you wish, but you must meet certain requirements and standards of UK GAAP and Law (e.g. IFRS, FRS102, FRS105, Companies Act 2006, etc.).
Either you manage the company’s accounts yourself or you hire a professional, you must be aware that the financial reports of the company are the director’s responsibility. Therefore, if you are hiring a professional, make sure you choose the most suitable you can find.
Essential responsibilities for directors
As a director of a limited company, you are legally responsible for running the company and ensuring all documents are sent out in time. This includes:
Confirmation Statement
Financial Reports
Update on any change in the company’s administration or personal data
Update on any change of directors
Update on any re-distribution or allotment of shares
Registration of charges (mortgage)
Update on any change regarding PSC (People with Significant Control)
Total cost
The total cost of setting up and managing a limited company depends on various factors, such as who registers the company, who runs it, what type of software is being used, whether you have your own registered office, the type of company etc.
In general, the cost can vary when you assign this to a third party, including the opening of a bank account.
UPECO offers full packages of company formation and accounting management. For a quote, click here.
If you wish to receive a professional advice before, you can book a Skype Consultation HERE.
For more details on companies, please visit GOV.UK
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Translated / Edited: Apostolia Nestoratou
© 2019 UPECO LTD
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ATTENTION!
This article intends to give only a general informative picture and should not, in any case, be taken as a rule. It is strongly recommended to seek a full and professional guidance specifically for your circumstances before making any decisions.