Beginners set up new limited company

Nosy

Hi, 

I wanted some advice on what to expect when setting up a new business. 

I am still at research stage and trying to learn as much as possible.
What are the steps required to set up a limited company? , The standard costs? Per month/year? Is there a minimum cost i must pay even if i make no money? 

What restrictions/limitations should i be aware of whilst working full-time and as a business owner? 

AskAsk

here is information you need on limited company
https://www.startuploans.co.uk/business-advice/how-to-set-up-a-limited-company/

tacpot12

There is a minimum cost even if you make no money, because you need to submit accounts to Companies House. The preparation of these accounts could be beyond you if you don't have a background in accounting, in which case you will also need to hire an accountant. You will also need to have a payroll, and a bookkeeping package or service. Your accountant can help you to find these. I would tend to use whatever the accountant recommends. 
 
Are you proposing to remain an employee with an existing employer, but to also start a limited company? If so, you will likely need your employer's permission - check your contract of employment and employees handbook. 

In terms of limitations, one of the biggest limitations is that the company's money belongs to the company. It is not yours, even in you are the only director. There are a limited number of ways to take money out of the company; dividends, salary, loans, and pension contributions. You can't just take money out without having agreed on what basis it is being withdrawn. Dividends can only be taken from profit, so you have to have made a profit, or be certain that you will make a profit to take a dividend. If you take a low salary and high dividends, or take dividends frequently, you are likely to get audited by HMRC and could end up with a big tax bill if you have not followed the rules. Your accountant will tell you the rules, but do bear in mind that they don't pay if you decide to do something that is later ruled to be dodgy by HMRC. It is your job to ensure that you understand the rules and stick to them. 

There is lots of good advice on the Small Business Toolbox channel on YouTube. 

ACG

You can file nil returns to companies house and I think there is an annual fee of maybe £10-20 from memory. 
Registering the ltd company is about £10-20.
You have to do accounts, which I think need to be completed by an accountant. I know ours are not cheap, but I imagine there are accountants out there who will do the bare minimum for maybe £300. 

AskAsk

ACG said:

You can file nil returns to companies house and I think there is an annual fee of maybe £10-20 from memory. 
Registering the ltd company is about £10-20.
You have to do accounts, which I think need to be completed by an accountant. I know ours are not cheap, but I imagine there are accountants out there who will do the bare minimum for maybe £300. 

i don't think you need an accountant and can do the submission yourself.  only very big companies need to have the accounts audited, or bookmakers i believe.

however, i believe you will need an accountant if you pay yourself a salary through PAYE, but i may be wrong here.

Brynsam

ACG said:

You can file nil returns to companies house and I think there is an annual fee of maybe £10-20 from memory. 
Registering the ltd company is about £10-20.
You have to do accounts, which I think need to be completed by an accountant. I know ours are not cheap, but I imagine there are accountants out there who will do the bare minimum for maybe £300. 

Easy guide to setting up a limited company: https://www.gov.uk/set-up-limited-company or https://www.gov.uk/government/organisations/companies-house

Accounts don't need to be prepared by an accountant for a small company. If you have a basic grasp of bookkeeping and a company with very few transactions, or use one of the simple low-cost online offerings designed for non-accountants (e.g. Kashflow), it's easy to file online (free) using the template on Companies House website.

The only unavoidable cost of registering a company (either dormant or trading) is £13 once a year to file a confirmation statement.

You sound pretty clueless, so reading a book on setting up your own business, plus a conversation with an accountant to ensure you set off on the right foot, could be a very good idea.

Best of luck!

Brynsam

AskAsk said:

however, i believe you will need an accountant if you pay yourself a salary through PAYE, but i may be wrong here.

You don't need an accountant if you are a PAYE employee. HMRC's free software does the job nicely for a small company: https://www.gov.uk/basic-paye-tools

Nosy

Thanks for the info guys. Yes i am clueless and still reading about setting up a business.  My plan is to continue working as a full time employee and have a ltd company set up for adhoc projects. I plan to have this company set in my partner's name as it may be a conflict of interest with my full time employment.  will check out the links you have provided. thanks again  
. 

Brynsam

Nosy said:

Thanks for the info guys. Yes i am clueless and still reading about setting up a business.  My plan is to continue working as a full time employee and have a ltd company set up for adhoc projects. I plan to have this company set in my partner's name as it may be a conflict of interest with my full time employment.  will check out the links you have provided. thanks again  
. 

Setting it up in your partner's name may make it harder to trace your involvement, but as I'm sure you are aware, you are still likely to be in breach of contract by providing your services via the company.

AskAsk

Brynsam said:

Nosy said:

Thanks for the info guys. Yes i am clueless and still reading about setting up a business.  My plan is to continue working as a full time employee and have a ltd company set up for adhoc projects. I plan to have this company set in my partner's name as it may be a conflict of interest with my full time employment.  will check out the links you have provided. thanks again  
. 

Setting it up in your partner's name may make it harder to trace your involvement, but as I'm sure you are aware, you are still likely to be in breach of contract by providing your services via the company.

yes, it wouldn't take much to put 2 and 2 together and arrive at 4.  messing around with the directors on the ltd company won't work.  there is also the issue of tax if the director is your partner as they would have to employ you or you would have to bill them.

Flint19

AskAsk said:

Brynsam said:

Nosy said:

Thanks for the info guys. Yes i am clueless and still reading about setting up a business.  My plan is to continue working as a full time employee and have a ltd company set up for adhoc projects. I plan to have this company set in my partner's name as it may be a conflict of interest with my full time employment.  will check out the links you have provided. thanks again  
. 

Setting it up in your partner's name may make it harder to trace your involvement, but as I'm sure you are aware, you are still likely to be in breach of contract by providing your services via the company.

yes, it wouldn't take much to put 2 and 2 together and arrive at 4.  messing around with the directors on the ltd company won't work.  there is also the issue of tax if the director is your partner as they would have to employ you or you would have to bill them.

The employer would be the limited company. If OP becomes a shareholder, that information will be public and easy to trace if the employer gets a sniff that something they don't know about is going on and might be in conflict. Depends if you're willing to take the risk of being sacked from your full time job.