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Setting up a limited company in the UK involves incorporation of a business. A company in the UK is entirely separate from the company directors, the company secretary – if one has been appointed – and the shareholders. The definition of a limited company according to the Companies Act 2006 is a ‘separate legal entity’.

The increased amount of administration involved when incorporating a UK business may be viewed by some as a disadvantage. However, others view the defined structure of regulation on an annual basis to be advantageous. There are three options for registering a UK company.

You could deal directly with Companies House, completing and submitting the relevant paperwork to them. A popular option is to use the services of a solicitor, accountant or a company formation agent. The third option is to use the online web incorporation service with Companies House. A registration fee is charged depending on which service is used.

As a UK limited company, tax will be charged at the current rate of Corporation Tax, which is due to decrease over the next couple of years. It is also necessary to operate a PAYE scheme to collect the income tax and National Insurance due from employees of the company.

Following registration with Companies House they will inform HMRC of your incorporation, who will contact you in due course. However, it is crucial to inform HMRC yourself when you register a limited company to avoid being charged a penalty. To ensure compliance with relevant legislation, seek guidance from a professional source.

About The Author

Kara Copple

An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.

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