Setting up a limited company is something that many small business owners try to avoid. However, in many instances, it can be a really attractive way to organise your affairs and give your business the chance to develop in a tax efficient and risk-controlled way. Not as complicated as some people might think, setting up a limited company can be done quickly and stress free. In this article we’ll answer some of the questions that we most often get asked about this subject.
Why is setting up a limited company a good idea?
There are many reasons why setting up a company is a good idea. At a high level, for many people, a limited liability structure means that their affairs can be dealt with in a more tax efficient way. For others they want the peace of mind of knowing that their business liability is restricted to the company itself – in other words, liabilities will not impact on your personal assets.
And drilling a bit deeper, there are certain lesser known advantages such as pension options, succession and raising funding through selling shares. In addition to these financial benefits, some people also think that a limited company gives a better, more professional impression to customers and potential customers.
Can I ask my accountant to set up a company for me?
Most accountants will happily set up a company on your behalf; all you need to do is ask. While setting up a limited company isn’t a particularly complicated or time consuming task to do yourself, most people prefer to hand the job over to someone they have confidence in. Accountants are accustomed to setting up companies, so will do it correctly and, in most cases, for a competitive price.
Is setting up a limited company online a good idea?
Setting up a limited company online is cheap and convenient. However, setting up a limited company is very different to buying a pair of shoes online. When it comes to buying shoes, if you know your shoe size, the brand and colour you want, if an online store is selling the shoes cheaper than you can get them on the High Street, you pretty much can’t go wrong.
When it comes to setting up a limited company online, it may be that you can do it incredibly cheaply, but how do you know that you’re getting the right outcome? Unless you know exactly what you want and what you need, it can be risky. What you should do is choose an online option that gives you some sort of human input so you can check that what you plan to do is right for you.
When I’m setting up a limited company, what information do I need?
In order to set up a limited company, you’ll need basic information such as the Registered Office Address, Director Details, Shareholder Details and Secretary Details. You’ll also need to have the name that you’ve chosen for your company. While none of this is complicated, many people find the peace of mind of having a professional on board to help well worth the small extra price you have to pay.
Do I need a bank account for setting up a limited company?
While you don’t need a bank account to set up your limited company, you will need one before you can trade. Because limited companies are a separate legal entity to you, you must have a bank account that is dedicated to the limited company before you can trade. What this means is that once your company is up and running you will need to make sure you have a bank account in the limited company name.
If you are setting up a limited company and would like help, all you need to do is get in touch. At The Smart Contractor, we will help and guide you to make sure that you make the right decisions as well as actually setting up the company for you if you want us to.