UK company formation is the process of creating a limited company in the United Kingdom. A limited company is a type of business entity that is separate from its owners, meaning that the owners’ personal assets are not at risk if the company goes bankrupt.
Why form a UK company?
There are many reasons why you might want to form a UK company. Some of the benefits of forming a UK company include:
- Limited liability: As mentioned above, limited liability means that your personal assets are not at risk if the company goes bankrupt.
- Tax benefits: UK companies can benefit from a number of tax breaks, such as the Research and Development Tax Credit.
- Access to finance: UK companies are more likely to be able to obtain finance from banks and other lenders.
- Credibility: UK companies are seen as more credible by customers and suppliers.
How to form a UK company
There are a few steps involved in forming a UK company:
- Choose a company name: Your company name must be unique and cannot be the same as the name of any other company already registered in the UK.
- Choose a registered office: Your company must have a registered office in the UK. This can be your home address or a rented office space.
- Appoint directors and shareholders: Your company must have at least one director and one shareholder. Directors are responsible for running the company, while shareholders own shares in the company.
- File the necessary paperwork: You will need to file a number of documents with Companies House, the UK’s company registry. These documents include the Articles of Association (the company’s constitution) and the Memorandum of Association (the company’s founding document).
- Pay the filing fee: There is a filing fee of £12 to form a UK company.
Once you have completed these steps, your company will be officially registered with Companies House.
What are the ongoing costs of running a UK company?
There are a number of ongoing costs associated with running a UK company. These costs include:
- Annual return: You must file an annual return with Companies House every year. The cost of filing an annual return is £13.
- Company secretary: If your company has more than one director, you will need to appoint a company secretary. The cost of appointing a company secretary varies, but it typically costs around £100 per year.
- Accounting fees: You will need to have your company’s accounts prepared by an accountant. The cost of accounting fees varies depending on the size and complexity of your business.
- Taxes: UK companies are subject to a number of taxes, including corporation tax, income tax, and National Insurance. The amount of tax you pay will depend on the profits of your company.
Overall, the costs of forming and running a UK company are relatively low. If you are considering starting a business in the UK, forming a limited company is a good option.