How to set up a LTD Company

This is a strange one as many people are daunted by the idea of a LTD company and have absolutely no idea where to start. I also feel that there is a misconception when it comes to what a LTD company actual means. 

Being a LTD company sounds big and scary and official. 

If I told you all you needed was £12 and access to the GOV.UK website you’d probably laugh and not believe me, but it’s true. 

Anyone can do it. No you don’t need to be earning a certain figure or have a million pounds in the bank, just £12 and a business idea will do. 

Before setting up as a LTD company you need to have a look at your different options and see which path is right for you and your business.

As you have:

Partnerships 

• A partnership is when there is more than one person involved. This is where you and your partner both share the responsibility for the business, including bills and any losses the business may face. Partners also share the profits of the business an each partner shares tax on their share. All you need to do is chose a name and who will be your business partner. 

Sole Trader 

• This means you run the business by yourself and do not have any business partners. You yourself are solely responsible for the business. You keep all of your businesses profits and pay the tax on your businesses earnings. Please note that you must also follow certain rules on naming and running your business. All information can be found on the GOV.UK website. 

Limited companies 

• So the difference with a limited company is that it is a form of business which is legally separately from its owners. A limited company must be incorporated at Companies House (this is where you will need your £12). A LTD company has separate finances to your personal ones so you will also need to set up a business bank account. The company will have company shares, the share amount will be 100% to you if you own the company by yourself or if you have a LTD company with someone you will have to split the shares at amounts that see fit. LTD companies can be found on companies house and all LTD companies information can be found on Companies House. 

After researching all of the above options and potentially talking with an accountant you will be able to get a feel for what is right for you and your business. 

It would be a good idea to speak with an accountant before setting up as one of the above options. Most accountants will offer a 30 minute consultation go free and you can ask for their advice on what they think is best suited to you. They will able to tell you the differ tax benefits of each etc. 

Personally my partner and I have set up our businesses as limited companies as that is what best suits us and also aligns with our future goals. 

It is important to not only look where you and your business are at currently but also where you see yourself and your business in the future in 1,5,10+ years. This will play a part in how you choose to set your company.

I hope this has been helpful, even if it just helps one person it’s been worth while. 

Just remember if you can dream it, you can achieve it. Everyone started from somewhere. 

Bye for now 

Xx