An Easy Guide To Setting Up A Company

By Swindon Link - 31 January 2022

Features

The act of setting up your own company is an exciting step. But it can also be daunting, especially if you're a first-time entrepreneur or don't have a background in business.

It doesn't need to be that way, though! This article will outline the steps you need to take when setting up your company and provide some advice on the best ways to get started. It's a step guide to give you all the information you need from the company registration AU to getting the right internet domain sorted.

Choosing a Business Structure

There are three main types of structure to choose from as a new business: sole trader, partnership, and a company limited by shares. Try not to rush this decision, as it will seriously impact how you run your business going forward.

Sole Trader

This is the simplest business structure because there are no set-up formalities, and it does not require any ongoing administration. You also do not need to keep full records of your business income and expenditure or submit company accounts. The downside to being a sole trader is you are personally responsible for everything that happens with your business, which means you are liable for any business debts.

Partnership

This is where two or more people come together to run a business. Like sole traders, partners are personally responsible for the success or failure of the venture. Partnerships must file annual accounts at Companies House, and these are open for public inspection under the terms of the Partnership Act 1890.

Company

This is by far the most complex business structure to set up, but it does offer limited liability protection for company members (i.e., shareholders) which sole traders and partners do not enjoy. Limited companies can also be more flexible when it comes to tax because you can separate personal income from company earnings, which is known as a 'disguised remuneration scheme.' You may also want to employ staff, so being able to offer staff the benefits of limited liability is another benefit of this structure.

 

Keeping these things in mind, you are ready to begin your setup process. If you're having any troubles understanding the differences, or you need advice about starting a company, do not hesitate to contact legal representatives who will not only help you complete the steps but also deal with every little detail of your business. Also, they can help you with other legal matters that often come up when setting up your business.

Naming Your Company

Choosing a name for your company is one of the most exciting parts of setting up, but it can also be one of the trickiest. With so many options to choose from, you need to take things seriously and do some research before making any decisions about what to call your business. Make sure you have at least three different variations on potential names and try using Google Ads to see what happens.

 

Remember that your company must be distinguishable from names already registered at Companies House and other similar-sounding names in the geographical area where you intend trading. If it is not, then there is a chance your application could be delayed or refused (this has happened many times before). You also need to make sure the name you pick is available in any country/from where your company operates.

 

Besides the name, your company will need a street address and a registered office address, which can be the same. Include your name and an element of identification, such as a personal number or national insurance number. Keep in mind that you need to keep this address up-to-date should you ever change it.

How Much Money Your Company Needs to Get Started

Okay, this step can feel a little overwhelming because there are so many factors that need to be taken into consideration when calculating how much money you will need for your new business venture. Basically, you need to think about how much it will cost you to set up your business, purchase any necessary equipment/goods for the first few months of trading, etc. You should also consider other expenses that are likely to crop up after you have started trading, such as inventory costs, telephone bills, fees for services, and so on.

Internet Domain

In terms of what you need to do, this is a relatively simple process that should take about five minutes or less. Under normal circumstances, all you will need to get your internet domain name is a valid email address and a credit card. Once these things are in place follow the link from your hosting provider that says 'register now,' fill out the form with your required name, confirm you are human, and pay the fee.

 

That's it - you have now registered an internet domain name! This registration works worldwide, so you can use it for your UK business just as easily as any other. However, if you want to use this domain in connection with another country, then you will need to ensure that the registration is not included in a global block. This can be done by contacting your local internet registry, but you must do this before the domain name is registered, or it may be too late.

Taxes in the UK

Taxes in the UK can be a little complicated, particularly if you do not have much prior knowledge in this department. Fortunately for anyone setting up a business here, some very straightforward rules apply to newly formed companies, and these include:

 

- No tax is payable on any income received before your company becomes active or starts trading.

 

- Once your company becomes active, you are required to pay corporation tax on the profits that it makes.

 

- You are not responsible for registering with HMRC until just before or after your financial year-end date.

 

- VAT registration is only necessary if you have reached a certain turnover threshold. It can vary depending on what business you run, but it doesn't have to be paid until you hit that level.

 

- Large corporations (those with annual turnovers of over £86,000) must file their returns online using the GOV.UK website.

 

 

Setting up a company in the UK is not as difficult as it may seem. The first step you need to take is registering your company at Companies House and then choosing an appropriate name for your business. You also need to decide on what type of entity will best suit your needs (for example, whether you want to register as a limited liability partnership or just simply act under one person's name). Once these things are settled, some other important steps must be taken such as obtaining tax registration numbers, getting internet domain names, and paying taxes.

 
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