2020 / FEBRUARY 20
Usually, this company is limited by shares meaning that it is legally separated from the shareholders/directors who run the company and that the shareholders’ liability is limited to the amount of the share capital.
The share capital is fixed freely and does not have to be paid unless the company has to shut down.
A limited company must have at least one shareholder and one director who can be different people.
Shareholders can be either individuals or companies. Directors must be individuals and at least 16.
Company secretaries can also be appointed but it’s not mandatory.
Directors must take decisions according to the company’s rules stated in its articles of association. They’re responsible for keeping the company records, report changes, filing the accounts and Company tax returns as well as paying Corporation tax.
They can be fined, prosecuted or disqualified if they do not meet their responsibilities.
Directors can be employees of the company and get a salary with a payslip. In that case, they’re applied the same social contributions as other employees except for pension (NI contributions and income tax via PAYE).
They can also be paid with dividends. These are not subject to social contributions but to income tax only with special rules.
A Limited company is subject to Corporation tax (CT) on its profits, and director’s wages are deductible from those profits.
Dividends are not deductible from the company’s profits and thus subject to CT first. From the directors’ perspective, dividends are then subject to income tax via a self-assessment return. They benefit from an annual exemption called ‘dividend allowance’ (£2,000 for tax year 2019/20) and above this allowance, income tax should be paid at special rates depending on the directors’ income tax band :
At least once a year, shareholders gather during an Annual General Meeting in order to approve the accounts. Also, the director must complete a confirmation statement with Companies House every year stating if they were changes with the company (change of directors, shareholders, address…).
They must appoint an auditor unless the Limited company qualifies for an audit exemption if it has at least 2 of the following:
In order to incorporate a Limited company in the UK, you’ll be required to have:
The following steps must be followed in order to incorporate your Limited company:
Incorporation of a Limited company with Companies House takes up to 2 working days.
ATLANTIC PARTNERS in London can advise you on the best way to set-up your business and will help you incorporate your company in the UK.
Give us the opportunity to meet you and we will talk about your business, your projects and how we can make your own environment more efficient.
Our success also and above all depends on the success of your business.