A limited company can be set up to run your business.
A Company’s finances are separate to your own personal finances.
Any profit it makes is owned by the company, after it pays Corporation Tax.
Every limited company has ‘members’ – the people or organisations who own shares in the company. Directors are responsible for running the Company. Directors often own shares, but they don’t have to.
There are many legal responsibilities involved with being a director and running a limited Company.
Limited by shares
Most limited companies are ‘limited by shares’. This means that the shareholders’ responsibilities for the Company’s financial liabilities are limited to the value of shares that they own but haven’t paid for. Company directors aren’t personally responsible for debts the business can’t pay if it goes wrong, as long as they haven’t broken the law.
Private company limited by guarantee
Directors or shareholders financially back the organisation up to a specific amount if things go wrong.
Public limited company
The company’s shares are traded publicly on a market. You can also consider setting up a private unlimited company as an alternative legal structure. Directors or shareholders are liable for all debts if things go wrong.
- put together Annual Accounts
- send Companies House an annual return
- send HMRC a Company Tax Return
- The Company must register for VAT if you expect its takings to be more than £82,000 a year.
- If you’re a director of a limited company, you must:
- fill in a Self Assessment Tax Return every year
- pay tax and National Insurance through the PAYE system if the company pays you a salary