Setting up a limited company as a contractor is an exciting step towards building your own business. However, the process can seem daunting, especially if you are not familiar with the ins and outs of business registration.
In this article, we`ll guide you through the essential steps to set up a limited company as a contractor.
Step 1: Choose a name for your company
Choosing a suitable name for your company is crucial, as it is the first thing that potential clients and customers will see. It is important to choose a name that reflects what your business does and stands for.
To register the name of your company, you will need to check if it is available on the Companies House website. A useful tip is to avoid using a name that is too similar to an existing business, as this can lead to confusion and legal issues.
Step 2: Register your company with Companies House
Once you have chosen a name for your company, the next step is to register it with Companies House. This can be done online or by post.
When registering your company, you will need to provide the following information:
– The name of your company
– The address of your company`s registered office
– The names and addresses of the directors and shareholders of your company
– Details of any shares issued by your company
Step 3: Open a business bank account
Next, you need to open a business bank account. This will allow you to keep your personal and business finances separate.
When opening a business bank account, you will need to provide the following information:
– A copy of your certificate of incorporation from Companies House
– Details of the directors and shareholders of your company
– Your company`s business plan
– The expected turnover of your company
Step 4: Register for VAT
If your company`s turnover is over £85,000 a year, you will need to register for VAT. This can be done online through the HMRC website.
VAT registration will allow you to reclaim VAT on business expenses, and also charge VAT on goods and services that you supply.
Step 5: Set up a payroll system
Finally, you need to set up a payroll system to pay yourself and any employees of your company.
You can choose to do this manually, using spreadsheets and Deductions to calculate tax and National Insurance contributions. Or you can use an online accounting software, which can automate the process and save you time.
In conclusion, setting up a limited company as a contractor can seem like a daunting task. However, by following these essential steps, you can ensure that your business is registered correctly and compliant with legal requirements.