If you’re reading this, you’ve probably come up with a great idea that you want to make into a business. More than likely, unless you’ve already made millions from selling off your last great idea, money is going to be tight.
If that’s the case, you’re obviously not going to go out and get yourself a Finance Director or CFO. So does that mean that you have to deal with all of those issues yourself?
Well, no. There are plenty of people that can help you. There are formation agents that form your company, bookkeepers that run your books, accountants that deal with Companies House and HMRC, and software companies that will sell you wonderful cloud-based accounting software.
Or there’s Nimble, who’ll do all of this for you. Then, once you’re up and running, we’ll be there to help you make a success of your great idea. You’re not an accountant, you’re an entrepreneur. So you need someone who can be your ‘right-hand person’ whilst you work on your business. But at this stage, you can’t afford to fork out thousands, or even hundreds per month for this. That’s where Nimble come in.
If you do choose to do it yourself, here’s what you need to know:
1. NAMING YOUR COMPANY
Before you talk to Companies House, you’ll need to figure out what your business is going to be called. A really good place to go if you’re struggling for a name is www.squadhelp.com . You post a small brief about your idea / business, then they run a competition across thousands of creative types to come up with a suitable name (they will also do the same for logos and websites).
There are a few rules about what your company can and can’t be called in the UK, which are shown here.
2. REGISTERING WITH COMPANIES HOUSE
This is a fairly straightforward process, that you can either do online, or use a formation agent to do. This will mean that your limited company has become ‘incorporated’ or born.
What you will need is a registered address and a director’s service address. Both of these are made public on Companies House website, so you may prefer to use another registered address from a company like www.ukpostbox.com. Give us a call to discuss this as we can advise then arrange this for you if it suits your company.
The registered address has to correspond to where in the UK the company is registered, so if it is registered in England and Wales, the registered address needs to be there too.
You’ll also have to decide on the shareholders and directors of your company. Issuing shares to a spouse is a common way to keep tax low, so this should be thought about at this stage. Again, if you want to discuss your options, give us a call.
3. REGISTERING WITH HMRC FOR DIFFERENT TAXES
Depending on the nature of your business, there are a few different things you’ll need to register for with HMRC. The main items to consider are:
a. Government gateway account – this is the main online access to HMRC services.
b. Corporation tax – as a limited company, you’ll need to register with Companies House within 3 months of starting to do business.
c. VAT – to register or not to register? Which scheme to choose? Call us to discuss.
d. CIS – if you’re company is going to be operating in the construction industry, this will apply. There are big fines for getting this wrong, so call us and we’ll talk you through what it means.
e. IR35 – this is legislation to determine whether you are really a limited company, or in fact really an employee working for an employer through a limited company.
4. REGISTER WITH OTHER STATUTORY AND REGULATORY BODIES
This really depends on the industry your ltd company is in. There could be any number of the following:
a. Information Commissioner’s Office – this is the body that manages data protection.
b. Institutes – for example, chartered accountants like Nimble need to be registered as a practice with the Institute of Chartered Accountants.
c. Money Laundering Regulations
5. FIND AN ACCOUNTANT AND / OR BOOKKEEPER.
Let me be clear here, there is no legal requirement for a small UK limited company to use an accountant to do anything, including file annual accounts or tax returns.
However, you’re not in business to do these tasks. You need to do what you’re good at doing, and not what can be done for you in a much more efficient way by someone else.
More than that, without an accountant, you’re likely to miss out on tax advice that can save you money, or perhaps worse, you may find yourself getting fines from HMRC or Companies House for not complying with the relevant laws.
For me though, there’s more to it that just compliance and tax efficiency. And this next point is really the reason that Nimble exists. A good accountant will work with you to analyse your financial information and key performance indicators (KPIs). They can act as your Finance Director, pointing out ways to improve the profitability and growth of your business. They can be absolutely crucial business advisors.
6. PICK AN ACCOUNTING SOFTWARE PACKAGE
This is really necessary if you’re wanting to run your business properly, and maximize the chance of success. Yes, you can in theory use Excel or even just a notepad and a calculator, but that’s really not the way to run a company with aspirations of growth and profitability (you’ll also be forced to move to accounting software in the next couple of years by HMRC, through their ‘Making Tax Digital’ – see article on this here).
IN A NUTSHELL
There are definitely lots of things to think about when setting up a limited company. But the key question is whether you want to sort these things out yourself, or whether you want to pass these issues to somebody else.
With Nimble, you can rest assured that your company is being set up quickly and efficiently, and that you’re compliant with the various laws involved. You’ll have us to do all the bookkeeping, accounting and filing work that necessary to keep your business on track. But most importantly, you’ll have people by your side that can help you make a success of your business.
Drop us an email at email@example.com if you have any questions about setting up your limited company, and we can arrange a call.