Company Formation UK For Beginners

If you are new to the corporate world, there are some things that you should know. There are many aspects that go into starting a business. All businesses must be registered with the Companies House, you do either go down to the Companies House or do it in person or you can register online. But because you are a beginner, it may be best to go down and file. You will get everything you need to start your business right.

You will need to fill out your Memorandum of Association as well as the Articles of Association. You must also create your list of shareholders, directors and secretaries. You must have a minimum of 1 director and 1 secretary, you can have the secretary as a director but then you will need more than one director, by law in the United Kingdom, a company can have neither a secretary nor director. There must be one at all times.

You should have established what type of company you are, such as a partnership or sole owner. For people just starting up a company formation UK, it would be best to start as a sole ownership for now. It may be easier to keep track of your business for now, you will know what money is coming in and what money is going out. You will be responsible for the company as well as liable if the requirements for the Companies Act are not met. That is where your directors and secretary come in.

You will have to register with Inland Revenue as self employed, you will be responsible for paying the company tax at the end of the tax year. You will have to set up income taxes as well as corporate taxes. As for Value Added Tax or VAT, you won’t be required to register until your business reaches a turnover in 12 months. It would also be a good idea to find out all you can about VAT from an accountant.

If you are self-employed then you must be responsible for the Class 2 NI Contributions, this is about £2.05 a week. If your income as a result of being self-employed is on the low side you may be eligible for the Small Earnings Exception. You may want to consult an accountant on that. There are some advantages of being sole owner of a company formation UK.

Your profits can be taken out without incurring any PAYE problems. The Tax Payable is counted as Income Tax and it can be paid in two installments rather than one lump payment. You will have less statutory controls, the easiest and least expensive form of ownership and there is no requirement for registration or for filing any documents.