Deciding to go limited is one thing, but what do you actually need to get started with this process? Have a look at our limited company checklist to make sure you have everything you need in place.
Getting started with your own limited company can seem like an intimidating process, but it doesn’t need to be. The actual process of forming your company only takes around 20 minutes, but it can be stressful if you don’t have all the relevant pieces in place before you start contracting.
But don’t worry! We’ve got a checklist for you to go through before you finally go limited. If you can get all these steps ticked off, you’ll find you’ll be in a great place to start your journey as the owner of a limited company.
1. Think of a company name
If you don’t already have a name planned out for your company, now’s the time to think of one. As a contractor, you can operate by calling yourself whatever you like, and many choose to simply use their personal name. However, your company will be a separate entity to yourself, so will need a title of its own. Limited companies need to have a unique name which is not being used by another company. Check Companies House to see if your preferred name is available.
2. Secure a website
Before you fully commit to the name you’ve chosen, you need to make sure you are able to use that name for your company website. Even if you’re the only business with that title, you can’t guarantee someone won’t have already taken the domain name you’re looking for.
Type in the web address you want to take and see what comes up. If there’s already a website there - and you’ve tried both .co.uk and .com - then you might have to go back to step one. However, you can always try a variation on your company name if you think it will work as an alternative.
3. Register your company
Once you’re certain you have a name for your business, you will need to register at Companies House. This is a fairly quick process, and costs very little. It’s simply a matter of filling in your new company’s details online so the UK government has a record of its existence.
You’ll need to list the company’s directors and shareholders. There might not be any besides you, but if there are, you’ll need their details to hand as well. Companies House will want to know their name, address, date of birth and how many shares of your company they will own.
4. Set up a bank account
Now your company is a distinct legal entity, it will need its own bank account. This is absolutely essential, as you will not be able to use your personal account for your business’ finances anymore, or vice-versa. You will need to withdraw your salary and dividends from your company account and spend them from your personal account.
Be sure to shop around for specialist business bank accounts rather than just opening up the first one you see. Don’t be seduced by short-term rewards either; it will be far better in the long run to secure a good interest rate or a low monthly fee than any one-time offers a bank might put in front of you.
5. Make sure you have all the relevant insurance
Depending on your company, you will need to have certain types of insurance. For example, if you offer any kind of professional advice as part of your business offering, it’s a good idea to purchase professional indemnity insurance to protect yourself. Similarly, if you’re planning to take on staff you’ll need employers’ liability insurance.
Various sectors might have their own industry-specific types of insurance they’ll need to arrange as well. If you’re unclear about what you need - or just want to make sure you’ve ticked all the right boxes - it’s a good idea to get some financial advice, as if you find yourself without the right insurance and something goes wrong, it can be very costly.
So, how do you get started?
You can go straight to Companies House and set one up online if you'd like, but in order to get the most out of going limited - especially when it comes to your taxes - it's usually a good idea to get advice and support from a specialist contractor accountant.
PayStream offers a range of limited company and accountancy services, depending on your needs, we will help you set up your business and register it with Companies House at no extra cost to you. We can take you through all the necessary steps, and make sure you are making the most out of going limited.