About Limited Companies
|Limited company basics|
|Why own a limited company?
Every year thousands of people decide to set up in business. They do it for a variety of reasons, but taking control and changing lifestyle is the motivation for many. The biggest attraction of setting up a business is the independence provided by being your own boss and the chance to have the lifestyle you want.
What does limited liability mean?
Can anyone be a director?
What are the Directors’ duties to the company?
What responsibilities does a director have towards Companies House?
What happens if accounts or annual returns are not submitted?
What if the accounts are delivered late?
How can prosecution and late filing penalties be avoided?
What are the directors' powers and financial liabilities?
The Companies Act 2006 requires company directors to act in a way most likely to promote the success of the business. You must exercise a degree of skill and care. You must:
You must act in good faith in the interests of the company as a whole. This includes:
You must obey the law:
If in doubt, take professional advice. Acting improperly can lead to fines, disqualification from being a director, personal liability for the company's debts or a criminal conviction.
|Drawing a salary|
|What elements of pay are in my payroll?
As an employee of your company you are entitled to draw a salary, and as the director you may decide on the level of salary you require. If you incur personal expenses whilst in the performance of your duties, you may claim these expenses back from your company. As a shareholder in your company, you may draw a dividend from your company provided that you have allowed for company taxes.
How often should I pay myself?
What is the most tax efficient way to pay myself?
What are dividends?
|What are expenses?
Personal expenses are those expenses incurred Wholly and Exclusively in the running of your business and may be claimed as long there is no personal benefit attached.
Why should I claim expenses?
What types of expenses can I claim?
There are essentially two main types of expense - a Claimable expense and a Reimbursable expense. Claimable expenses are those where you pay for the expense from your personal funds and then claim it back from your Company; Reimbursable expenses are those where you pay the expense yourself but your end-client reimburses you under the terms of your contract with them.
Do I need to keep receipts?
|Accounting and taxes|
|What are my responsibilities as the director?
A company director is responsible for ensuring that all the necessary financial statements, tax returns and tax payments required by law are submitted and paid to the relevant authorities on time. These authorities are mainly, but not limited to, HMRC (Her Majesty's Revenue & Customs) and Companies House.
You pay all your personal and corporate taxes as well as national insurance contributions to HMRC together with your annual financial statements, tax returns and employers returns.
You submit copies of your annual financial statements to Companies House as well as an annual return which contains information regarding the officers of the company, its shareholders, its registered address amongst other things.
You will receive a leaflet from Companies House once your company is incorporated which you should read and keep in a safe place.
What is PAYE and NIC?
What is Corporation Tax?
What are my company accounts?
What is VAT?
Do I need to submit a personal tax return (self assessment)?
|What happens when I no longer need my company?|
|If you no longer need the company it should be formally wound-up. If you wish to do this please contact us, as the company must be in an acceptable position (i.e. with no outstanding debts or creditors) to enable this to happen. We will then send you the forms to begin formal winding-up and the dissolution of the company.|