Registration of Limited Company
Limited companies are among the two most popular types of company chosen by UK business people, with the sole trader route the other main avenue. All limited companies must be registered (‘incorporated’) with Companies House. To do this you need:
- A company name - there are rules on what it can and can’t include
- An address for the company
- At least one director
- At least one shareholder
- The agreement of all initial shareholders subscribers to create the company - known as a ‘memorandum of association'
- Details of the company’s shares and the rights attached to them - known as a ‘statement of capital’
- Written rules about how the company is run - known as ‘articles of association’
Once the company is registered you will get a ‘Certificate of Incorporation’. This confirms the company legally exists and shows the company number and date of formation.
Corporation tax is a tax imposed on the net income of the company. Every limited company must pay and keep records for Corporation Tax on its taxable profits. The Corporation Tax must be set up within 3 months of the start of the company’s accounting period. You may get a penalty if you don’t. At the end of a financial year, every limited company must prepare full (‘statutory’) annual accounts.
|File annual accounts with Companies House||9 mth. after your company’s financial year ends|
|Pay Corporation Tax||9 mth. 1 day after your company’s financial year ends|
|File a Company Tax Return||12 mth. after your company’s financial year ends|
ABS Service Ltd can help you with:
- Company Tax Return
- Defining your Company Income
The Corporation Tax rate for company profits from 1 April 2015 is 20%
You don’t get a bill for Corporation Tax - it’s up to you to work out how much your company owes. You report Corporation Tax after you pay it, by filing a Company Tax Return.
Corporation Tax also applies to:
- most unincorporated associations, eg clubs and co-operatives
- foreign companies with a UK branch or office
Your company must keep records for Corporation Tax.
Profits you pay Corporation Tax on Taxable profits include the money your company makes from:
- doing business (‘trading profits’)
- selling assets for more than they cost (‘chargeable gains’)
If your company is based in the UK, it pays Corporation Tax on all its profits from the UK and abroad. If your company isn’t based in the UK but has an office or branch here, it only pays Corporation Tax on profits from its UK activities. If you have nothing to pay you still have to tell HMRC that no payment is due - you must do this by your deadline for paying. You must still file your Company Tax Return. Allowances and reliefs.
You can deduct the costs of running your business from your profits before tax when you prepare your company’s accounts. Anything you or your employees get personal use from must be treated as a benefit. Some expenses aren’t allowed for Corporation Tax, eg entertaining clients - add these back to your profits when you prepare your Company Tax Return.
Claim capital allowances if you buy assets that you keep to use in your business, eg:
- business vehicles, eg cars, vans, lorries
Annual Return £40.00
The return an investment provides over a period of time, expressed as a time-weighted annual percentage. Sources of returns can include dividends, returns of capital and capital appreciation. The rate of annual return is measured against the initial amount of the investment and represents a geometric mean rather than a simple arithmetic mean.
Annual return is the de facto method for comparing the performance of investments with liquidity, which includes stocks, bonds, funds, commodities and some types of derivatives. Different asset classes are considered to have different strata of annual returns.
An annual return is a snapshot of general information about a company's directors, secretary (where one has been appointed), registered office address, shareholders and share capital. Every company must file an Annual Return to Companies House at least once every 12 months. The window for filing the Return must be within 28 days after the anniversary of incorporation or of the made-up date of the last Annual Return.
The following information is captured on an Annual Return form:
- Company Name
- Company registration number
- Company type (private, public, etc.)
- Company registered address
- Principal business activities
- Company Secretary details (if you have one)
- Company director details
- The ‘made-up date’ (the date to which the return is made up)
- Details on the issued share capital
- Shareholder details
- Whether or not the company has traded during the past year
Details of share capital and shareholdings If your company has shareholders, you must provide a statement of capital with your Annual Return. This statement discloses the number of shares in existence, the nominal value of the shares, the amount paid up or unpaid on each share, and the characteristics of each class of share in issue. Companies House imposes no penalties for filing late annual returns but the longer you leave it, the more serious the situation could become. It is a criminal offence if you simply fail to deliver an annual return at all – your company could be prosecuted, a director could be held personally liable and removed from office and, in severe cases, your company could be struck off the register.
Closing a Limited Company
The way you close the company depends on whether it can pay its bills or not.
The company can pay its bills (‘solvent’). You can either:
- Apply to get the company struck off * (Striking off, means the removal of a company´s name from the official Companies House register. The company name is then available to incorporate by a new company)
- Start a members’ voluntary liquidation**
* You can close down your limited company by getting it ‘struck off’ the Companies Register, but only if it:
- Hasn’t traded or sold off any stock in the last 3 months
- Hasn’t changed names in the last 3 months
- Lisn’t threatened with liquidation
- Has no agreements with creditors, e.g. a Company Voluntary Arrangement (CVA)
** You may choose members’ voluntary liquidation if your company is ‘solvent’ (can pay its debts) and:
- You want to retire
- You want to step down from the family business and nobody else wants to run it
- you don’t want to run the business any more
The company can’t pay its bills (‘insolvent’). When your company is insolvent, the interests of the people your company owes money to (its creditors) legally come before those of the directors or shareholders.
- You must use the creditors’ voluntary liquidation process. ***
*** A director can propose a creditors’ voluntary liquidation. Your company might be forced into compulsory liquidation**** if you don’t pay creditors.
**** Your limited company may be liquidated (wound up) if it can’t pay people or organisations (creditors) it owes money to.
Registered Office Address £120.00 per annum
Why use our Registered Office Address? By using our address as your company's registered office address, you will retain your personal address privacy, you will avoid changing the address of your company every time you would like to move houses.
What is more you will make sure that all essential documents from HMRC are directly send to your Accountant