Limited Company Formation in UK – Important Steps After Formation

Overview

Post the formation of a company or business at Companies House , there a multiple other things that need to be considered. Even though for each business the requirements may vary there are few things which are common to most businesses – setting-up a business bank account , dealing with HM Revenue and Customs (HMRC) etc. Below mentioned are some important steps that need to be kept in mind after company formation:

Open a business bank account

Since a limited company is a distinct entity to an individual, setting-up a business bank account is imperative as it helps to keep a track of business-related transactions (business income and expenses) without disturbing an individual’s personal expenses. In order to set-up a business bank account, an individual will have to complete an application form (either online or at the bank branch), and provide the relevant documents such as personal identification proof, address proof, along with company incorporation documents. Most of the banks in the UK offer the initial 2 years of free banking i.e. no transaction fees is charged for the first 1 -2 years. For example, businesses can open a bank account with either Barclays, TSB or CardOne

Having a UTR number and CT41(G) Form

A Unique Tax Reference (UTR) is a 10-digit number which is made available by HMRC to recently incorporated businesses or companies. This number is essential as it is required to file a Self-Assessment tax return . When a business is incorporated in the UK, HMRC automatically sends across a letter, containing the UTR number, to the business registered office address inside 3 weeks from the incorporation date of a company. However, if the letter containing the UTR number is not received within 3 weeks, an individual can contact HMRC on 0300-200-3310 to seek additional information on their UTR number

When a business is registered with Companies House, the Companies House automatically informs HMRC about it. HMRC will send a letter to the business around 3 to 4 weeks after the business or company is formed. This letter is referred to as a CT41(G) and the business will have to reply to it

Filing an application for business insurance

A business insurance is imperative as it protects the business if something goes wrong. There are numerous types of insurance, and few of them are obligatory for a company. For example, when the company hires employees, it will have to provide them with Employers' Liability Insurance. On the other hand, if the business is a small-business or start-up , it becomes important to protect the business from mishap. Newly formed businesses can seek guidance from their consultants and proceed accordingly.

Go-to-market for a business

In order to stay competitive in the market, a newly formed business will have it invest in it marketing and branding activities. Few examples include:

• Sales and distribution network
• Online presence by creating a website – This offers the business a wider audience. A website is the commencement of building a brand online. Though, it takes time to build an attractive website and even longer to get it up the rankings in various search engines, the quicker a business starts to build a business website the better!
• Social media – In today’s digital record, social media plays an important role in staying connected with customers. Businesses can set up a social media accounts with Facebook, Instagram, Google+, Pinterest, Twitter and use it as an effective way to interact with acquired and prospective customers
• Business cards – A business card comprises an individual as well as business details that can be shared with potential customers and suppliers (this is the most important tool for sales executives)
• Business Email – To be able to stay connected with potential clients and suppliers a business will have to create a business email address. By securing a domain name, a business can quickly set-up their own business email addresses

Organising Finances

Any successful business owner will all talk about the importance of organising finances as it is imperative to the smooth-running of the business. Getting details about annual returns, tax structure, payroll, and bank accounts might seem like a daunting task but is imperative to the success of a business

Bookkeeping

A business must keep track of everything that is being spent on business activities and everything the business is earning. Keeping correct financial records is a legitimate requirement; hence bookkeeping by an expert accountant is of utmost importance.

VAT Registration

Whether or not a business is value added tax (VAT) registered , it will have an impact on the pricing and accountancy needs of a business. A business does not have register until it hits the VAT threshold, however, it is a good option for certain businesses to willingly register

Get familiar with a company's annual requirements

Filing annual returns and related documents is an important step. All through the life of a business, an individual will have to deal with documents and forms to file to HMRC, Companies House etc. Please make sure that the business is well-versed with a company's annual requirements

Annual Returns

Businesses in the UK are required to submit to the Companies House an annual return each year. This informs the Companies House about any changes to the structure of the company or any other details such as the address change

Annual Accounts

A copy of accounts will have to be sent to Companies House each year. These will be made publicly accessible for anyone who wants to see them. Exactly what needs to be in the annual accounts is determined by on the size of business

Corporation Tax Return

In addition to annual returns and annual accounts a business sends to Companies House, it will also have to prepare a Corporation Tax return for HMRC. The return will compute how much Corporation tax the business need to pay basis the profit of the business

Details for a limited company

If an individual decides to form a Limited Company, few details might be displayed on public record. Companies House keeps an official records of all Limited Liability Partnerships (LLPS) and limited companies incorporated in the UK. Information pertaining of this is publicly available in order to create corporate transparency, and avoid tax evasion. Therefore, the public is able to monitor the business performance and be updated with the financial performance, management change or any other strategic move by the businesses. The below mentioned information will be made available on public record:

• Annual accounts
• Annual confirmation statement (formerly known as an annual return)
• Company status – live, dissolved
• Company structure
• Date of incorporation
• Details of directors and secretaries
• Details of LLP members
• Details of PSCs
• Details of shareholders or guarantors
• Insolvency details
• Key filing dates
• Name of company
• Nature of the business (SIC codes)
• Previous company name
• Registered office details
• Single Alternate Inspection Location (SAIL) address

Other important document received on registration Certificate of Incorporation

The Certificate of Incorporation is a proof that all the necessities of the Companies Act 2006 for registering a company are compiled and the company is registered. The certificate approves that the company legally exists and states:

• company name
• registration number
• date of formation
• type of company, e.g. Limited or LLP
• country of registration, e.g. Scotland, England and Wales
• issuing Registrar

The certificate will have an official seal of the Registrar of Companies at Companies House

Memorandum of Association

A Memorandum of Association (MoA) is a statement signed by initial company shareholders confirming their intent to form a company and become a member of the company upon formation

Articles of Association

The Articles of Association are defined as a company’s internal rulebook, which defines how the business will be run and decisions made

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