Whats the best way to start up a limited company

campbelldj

Hi, me and a friend are looking into starting up a small business and want to know how to go about it.

Need everything! Are these companies on the net anygood that do the ground work for you, get it set up etc?? can anyone recommend any?

I dont know what the best way to go is! Its only gonna be small. me and my friend are going to provide a service to people so does then 'our business' get the money and we pay our selves a wage from that or do we get the money direct and fund any expenses from the business from that? so confusing!

Dragonman

Before setting up a limited company yourselves (or paying someone off the web to do it for you), you might find it useful to go to one of the firms of solicitors or accountants who offer a free initial consultation for new businesses. They should be able to explain the various options open to you, eg whether or not a limited company is the best business vehicle for you, what the legal and practical consequences are of setting up a company, etc. Obviously they wouldn't be giving you free advice out of the generosity of their hearts. They would hope that if you do decide to set up a company you will do it through them, and that if the business takes off then you will become longterm clients. But you should get a useful initial steer on the options open to you.

ziknik

Setting up a limited company is easy, it takes between 30mins and 4 hrs in during office hours. Search in Google and pick a cheap company. (I don’t recommend https://www.eacbs.com . I have had trouble with them).

But, running a limited company carries a lot of legal responsibility. Don’t just jump in.

Have a read of this guide to freelancing

http://www.pcg.org.uk/cms/index.php?option=com_log_access&Itemid=425

You have to register but they don’t spam / pester you. PM me your email address if you want me to email it to you.

inmypocketnottheirs

I can recommend https://www.cscompanyservices.co.uk as a firm that supplies new untraded limited companies (called formation agents). I have used CS several times over the last 3 years or so, and have never had any problems. They are not the cheapest, not the most expensive, but offer a reliable and professional service.

HTH

misskool

Hi,

I'm moving your thread over the small business board where you will be likely to receive more appropriate responses.

Hermann

Are you sure you need a limited company?
You would only need to be a Ltd in certain circumstances, and they cost a fair bit to meet yearly requirements even if you have a small turnover.

You can trade/run a company as a sole proprieter or partners (get a written partnership agreement) very easily with a minimum of expense.

Don't go down the Ltd route unless you are very sure you need to.

Pennywise

You get what you pay for. Read exactly what you get for your money. Most online formation agents are very cheap, but just how much "advice" do you get?

I cringe when a new client comes to see me AFTER they have used a cheap formation company, because most don't understand the true implications of being a director or company secretary, many don't even know what share capital is, let alone how many shares have been issued (that they should pay for!). People don't understand the legal difference between directors and shareholders - we always get the question - "how do I pay a divided to the directors?" or "how much wage can we pay the shareholders?". Often I see memorandum and articles of association (the company's formal legal constitution) that don't comply with current company law and often completely unsuitable for the business. In fact, many times, I have advised the client simply to abandon their company and start a new one because it would be quicker and cheaper than trying to rectify a bad start up. Now, none of this is the "fault" of the formation agents - they have done what they promised, so can't be criticised - what they havn't done, nor were they paid/asked to do, was fully and properly explain the formation and tailor it to the business's needs.

When comparing the "formation" costs of a formation agent against a solicitor/accountant, you aren't comparing like for like. As an accountant, we discuss whether a ltd co is the right vehicle as opposed to an LLP, sole trader or partnership (most small businesses don't need to be limited companies!), we discuss the implications, pros and cons of who is to be secretary, director(s) and shareholder(s). We discuss registering for PAYE, VAT and corporation tax (which formation agents don't), we discuss accounting and book-keeping differences/requirements, we discuss expense claims for working from home, car travel, equipment and stock introduced personally, etc., etc.,

By all means, use a cheap online formation agent for the company formation itself (if you have to) but make sure you know what you are doing, which means doing plenty of research or seeing a professional beforehand.

As another poster has suggested, we also offer a free initial consultation, in the hope of impressing the potential client sufficiently that they remain with us for the long term - over 90% come back. As the actual "formation" itself is so cheap, we offer it as a freebie, so that we can use a known and trusted formation agent - otherwise we undoubtedly have to spend more time (billed to the client) to change and correct the formation documents to a more tailored and relevant version.

My advice has to be to go and see 2/3 accountants first before committing to anything. Most give a free consultation and you should use these to your advantage, to improve your own knowledge and understanding, even if you don't stay with any of them. Seeing an accountant in advance is always better than waiting until after the event - most "events" can't be changed once they have happened, thus making it harder and more costly to correct - get it right beforehand and you will have a much easier/cheaper life.