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Basic Rules For The LTD in UK

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18 views9 pages

Basic Rules For The LTD in UK

Uploaded by

f.fazel789
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Limited companies

A limited company is a company ‘limited by shares’ or ‘limited by


guarantee’.

Limited by shares
Limited by shares companies are usually businesses that make a
profit. This means the company:

• is legally separate from the people who run it


• has separate finances from your personal ones
• has shares and shareholders
• can keep any profits it makes after paying tax

Limited by guarantee
Limited by guarantee companies are usually ‘not for profit’. This
means the company:

• is legally separate from the people who run it


• has separate finances from your personal ones
• has guarantors and a ‘guaranteed amount’
• invests profits it makes back into the company
When you need to set up as a sole trader
You need to set up as a sole trader if any of the following apply:

• you earned more than £1,000 from self-employment between 6


April 2021 and 5 April 2022
• you need to prove you’re self-employed, for example to claim Tax-
Free Childcare
• you want to make voluntary Class 2 National Insurance payments
to help you qualify for benefits

How to set up as a sole trader


To set up as a sole trader, you need to tell HMRC that you pay tax
through Self Assessment. You’ll need to file a tax return every year.

Register for Self Assessment.

Your responsibilities
You’ll need to:

• keep business records and records of expenses


• send a Self Assessment tax return every year
• pay Income Tax on your profits and Class 2 and Class 4 National
Insurance - use HMRC’s calculator to help you budget for this

You’ll need to apply for a National Insurance number if you’re moving


to the UK to set up a business.

VAT

You must register for VAT if your turnover is over £85,000. You can
register voluntarily if it suits your business, for example if you sell to
other VAT-registered businesses and want to reclaim the VAT.
Working in construction industry

Register with HMRC for the Construction Industry Scheme (CIS) if


you’re working in the construction industry as a subcontractor or
contractor.

Naming your business


You can trade under your own name, or you can choose another
name for your business. You do not need to register your name.

You must include your name and business name (if you have one) on
official paperwork, for example invoices and letters.

Business names

Sole trader names must not:

• include ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public


limited company’ or ‘plc’
• be offensive
• be the same as an existing trade mark

Your name also cannot contain a ‘sensitive’ word or expression, or


suggest a connection with government or local authorities, unless you
get permission.

Example

To use ‘Accredited’ in your company’s name, you need permission


from the Department for Business, Energy and Industrial Strategy
(BEIS).

Check which words you need permission to use, and who from.

You’ll need to register your name as a trade mark if you want to stop
people from trading under your business name.
Set up a business
partnership
Register as an overseas
company
You must register an overseas company with Companies House if
you want to set up a place of business in the UK.

Who must register


You must register if you set up a place of business in the UK or if you
usually carry out business from somewhere in the UK.

Some types of company cannot register as an overseas company in


the UK, including partnerships and unincorporated bodies. Contact
the Department for International Trade if you need advice.

If you do not have a base in the UK

You do not need to register with Companies House.

If you’re developing property or land in the UK, you need to contact


HM Revenue and Customs (HMRC) to register for Corporation Tax.

If you’ve disposed of an interest in UK property or land, you need


to register for Corporation Tax online.

How to register
You must fill in form OS IN01 and send it to Companies House within
1 month of opening for business. The address is on the form along
with what documents you need to send.

You must send a £20 registration fee with the form. You can pay by
cheque or postal order.

Download ‘OS IN01 - Registration of an overseas company


opening a UK establishment’ (PDF, 980KB)
Changes to company details

You must tell Companies House within 14 days if your company


details change. This includes:

• name
• address
• what the business does
• details of directors, secretaries or people authorised to represent
the company
• company information, for example accounting requirements or the
powers of directors or secretaries
• company constitution (one of the documents made when you
formed the company)

Contact Companies House for help.

Companies House
Telephone: 0303 1234 500
Find out about call charges

Help from the Department for International


Trade
Overseas companies looking to set up business in the UK can get
help from the Department for International Trade. You can get
information about how business works in the UK, analysis of market
opportunities, and access to business and academic networks.

Department for International Trade


Telephone: 020 7215 5000
Find out about call charges

Setting up in Scotland, Wales or Northern


Ireland
You can get help from Scottish Development International (SDI) if
you’re looking to set up business in Scotland.

Scottish Development International


Telephone: 0800 917 9534
Find out about call charges

You can also get help with setting from:

• Business Wales
• Invest Northern Ireland
In a partnership, you and your partner (or partners) personally share
responsibility for your business. This includes:

• any losses your business makes


• bills for things you buy for your business, like stock or equipment

Partners share the business’s profits, and each partner pays tax on
their share.

A partner does not have to be an actual person. For example,


a limited company counts as a ‘legal person’ and can also be a
partner.

What you need to do


When you set up a business partnership you need to:

• choose a name
• choose a ‘nominated partner’
• register with HM Revenue and Customs (HMRC)

The ‘nominated partner’ is responsible for managing the partnership’s


tax returns and keeping business records.

There are different rules for limited partnerships and limited liability
partnerships (LLPs).

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