setting up LTD

myright

Hi guys

I'm forming a limited company. With myself only as a director and nobody else.

I need it for contracting work.

I've been on companies house to register.

In terms of shares etc. .. what's the best thing to ? And also is it best for me to be worker of my Ltd etc in tax point of view ? How do I do the share bit ?

Also could I change this at a later date ?

In terms of company address which will be residential address . Could I change this late date and when I change it . Will the old adrrss still show in public ?

Pennywise

I'd suggest you get an accountant on board who is the person to answer all these questions and a lot more you don't know you need to ask. You'll almost certainly need an accountant anyway for the year end accounts and corporation tax return preparation and filing, so best to get one sooner rather than later to avoid making any costly mistakes.

There are two very common mistakes that newbie contractors make when they try to do it themselves without an accountant. The "cost" of each is usually more than an accountant will cost for the year, so it's often false economy to try to save money by not engaging an accountant from the outset.

I see it all the time - contractors engage me several months after their first year end, usually when the filing deadlines are looming, and the first thing I notice is that they've made fundamental mistakes in their set up. You can't re-write history, so that's money lost forever.

Of course, people can and do do-it-themselves, in the same way that some people decorate their own homes rather than engage a decorator, or change their brake pads in their car rather than take it to the garage, or change a radiator rather than getting a plumber. But you need to research yourself properly, not rely on strangers on internet forums, and need to accept the consequences of not getting it right.

fishybusiness

Just to echo the advice of Pennywise....

I'm on the other side of the fence, I've set up 3 ltd's in the past and run them mostly without an accountant. Small turnover, small local businesses.

It seemed easy the first time, online company creation, had been a sole trader so knew a bit about accounting, then came the submissions....managed it until Corporation Tax and made a real mess of that. It is 'accountant speak', not 'trader speak', and I ended up paying an accountant to sort it out.

At that point I didn't have help to make decisions about the best tax position, expenses and depreciation. I worked those out for myself but it took a great deal of reading a probing the rules to understand. I could have done without it to be honest.

If you just want to get on with your life, get an accountant, you'll be much happier :-)

Aquamania

myright wrote: »

Hi guys

I'm forming a limited company. With myself only as a director and nobody else.

I need it for contracting work.

I've been on companies house to register.

In terms of shares etc. .. what's the best thing to ? And also is it best for me to be worker of my Ltd etc in tax point of view ? How do I do the share bit ?

Also could I change this at a later date ?

In terms of company address which will be residential address . Could I change this late date and when I change it . Will the old adrrss still show in public ?

I would also urge you to seek the advice of an accountant, particularly based on the fundamental questions you are asking, and especially in regards to the best way to take money from the company as that will depend on your circumstances.

Having said that, if you are determined to go it alone, and your situation is straightforward, the usual way is to pay yourself a salary under PAYE unto about the personal tax threshold, and then take any extra money as dividends etc.
(But as I and others said, this really is best advised by an accountant after they have discussed with you your exact financial position)

In regards to setting up the limited company, well I would suggest you actually use an online agent (if you want to save money by doing it youself) rather than try to do it via the Companies House site. Not only do they explain some of the questions you ask, but also help you to set up the limited company (by supplying mems & arts, etc) and could even be cheaper than going direct, as agents can get a discounted rate from CH.

But for a basic limited company, typically you would set it up as having a share capital of say £100 made up of 100 ordinary shares of £1 each.

You would take one share, or possibly two/three from the outset.

By taking one share, there are still 99 left than can be allotted at a later date if the need arose.
(You can usually increase the share capital of the company later if needed too - but that it a bit more difficult)

By taking two shares, then if you wanted to bring in a 50/50 partner, you could actually transfer one of the shares you hold rather than get the company to allot a new one.
But having a 50/50 split is usually discouraged as it can lead to stalemate situations if there is a failure to agree, so if you originally took 3 shares (leaving 97 unallotted), you could still tranfer 1 share and you'd still have the majority shareholding (i.e 2)

Every limited company must have a registered address. This is a matter of public record and is accessible from companies house by anyone.
You can change the registered address whenever you want (by advising companies house), but such changes are recorded and it's not difficult to find details of previous registered addresses for any limited company
(Be aware that currently there is an ability to actually obtain almost all filings from companies house for free ... and I think the intention is for this innovation to continue. But even if it doesn't, changes to a registered address are available from the basic history shown on the CH website. And anyone could always buy a copy of the filed record for about a quid or two if they really wanted it.)

myright

Hi thank you for the above information!! That's great.
I won't ever need to partner with anyone


U gave an example of having 100 shares. Could I just put down 1 share instead. It shouldn't make a difference ?

Aquamania

myright wrote: »

Hi thank you for the above information!! That's great.
I won't ever need to partner with anyone


U gave an example of having 100 shares. Could I just put down 1 share instead. It shouldn't make a difference ?

You could do, but I see no possible advantage in doing so.
All you will do is start off with a hurdle in front of you should at any point in the future, you decide you need to heve another shareholder.

As I said, you can usually increase the share capital of the company, but that's more difficult - just have a 100 to start with to allow flexibility in the future. Afterall, you did ask in your OP about the possibilty to change the share holding later