If you work through a limited company, you’re not the business, even if you’re the company’s sole owner. But how do shares work, who can be a shareholder, and what are your rights and responsibilities?
Business Structures - Limited Company
Most professional contractors work via their own limited companies. It remains the most tax-efficient business structure, despite the April 2016 dividend tax hike.
Company directors have more paperwork and legal obligations than umbrella company contractors, but in reality, a specialist accountant can take care of these administrative duties for you.
- If you only have 5 minutes, make sure you read 10 things you should know before setting up a limited company
- How much does it cost to set up a limited company?
- Limited company basics - how to set up a company, and the responsibilities you have as a director
- Limited vs. Umbrella - find out more about the advantages and disadvantages of each business structure
- For in-depth guides to setting up a company, try Limited Company Help
One of the main attractions of contracting via your own company is that the liability of its shareholders is limited. So, to what extent is the liability of company directors limited?
If you want to form a new company, alongside the Companies House application itself (IN01), you must also file Articles and a Memorandum of Association. Here, we explain what these documents are, and how to submit them.
There are several ways to set up your own limited company; via an accountant (a popular way), via a company formations agent, or direct with Companies House. Here we look at the typical costs associated with each option.
If you’ve decided to close your limited company, a members’ voluntary liquidation is the most tax-efficient way to do it. Here we explain what an MVL is, and how the process works.
If you have decided to trade via your own limited company, you have to submit an application to Companies House, the registrar of companies. Here, we’ve listed 10 bits of information you need to collect in advance to ensure your formation can be processed correctly the first time.
Many IT contractors work via their own limited companies. There are a number of benefits to incorporating; we look at how the formations process works, and what it means to be a limited company director.
A Standard Industrial Classification (SIC) code is used to identify the business activity of your company, such as ‘Information technology consultancy activities.’
If you decide to set up a limited company with other people – either for contracting purposes or to run another type of business, how do you ensure that all of your shareholders (including yourselves) are protected in case something goes wrong? A well-drafted shareholders’ agreement might be the answer.
Almost all contractors who provide professional services to clients trade via their own limited companies, or join PAYE umbrella schemes. Here we’ve compiled a table to help compare the pros and cons of each structure.