Incorporating your company is a shrewd business move for a contractor or freelancer. By setting up a limited company, you can protect more of your hard-earned profits, and minimise risk when dealing with high-value clients and contracts.
However, the ins and outs of going limited can seem a little overwhelming at first. To help you get your head around the steps to incorporating your business, we’ve put together a handy guide on how to set up a limited company.
What is incorporation?
Registering your business with Companies House is known as incorporation. It establishes your company as a separate legal entity, with a certificate of incorporation to prove it. By incorporating your business, you become the Director of a company, with more flexibility on how you withdraw your profits.
Operating under a private limited company not only limits your own liabilities when operating otherwise; this legal status can make your contracting or freelancing services more attractive to potential clients, by minimising the risk of dealing with a one-man band.
Setting up your company
To incorporate your business, you need to choose a unique company name that isn’t already registered with Companies House. You will also need to register a Director and shareholder (that’s you!), and an address for your company.
If you don’t want to include your home address, ask your accountant if you can use theirs instead. They can also help you draw up a memorandum of association and articles of association, outlining how the company will be run.
It’s important to note that setting up a limited company goes beyond registering with Companies House. You will also need to set up a business bank account, display your company registration number on your website and invoices, and secure a PAYE number from HMRC to get you started on the payroll.
Company formation support
We can help with all of the above so that all you need to do is choose a name that best sums up who you are and what you do. Do you want to become Joe Bloggs Limited, or create a company name that gives your business room to blossom in the future?
Bright Ideas Accountancy offer a company formation service free of charge for our Gold package customers, meaning you can benefit from our ongoing accountancy services, such as filing your self-assessment and calculating your tax liabilities. However, if you simply need a hand with setting up a private limited company, we offer this service for just £85+VAT, and can have your business up and running in as little as 3 hours.
Establishing a limited company may seem daunting at first, but it’s an exciting step in the life of any contractor or freelancer. Follow these tips to take the stress out of incorporating your business, and get in touch with Bright Ideas Accountancy if you want full assurance that your company has been set up by a team of experienced contractor accountants.
