Tax Tips For Entrepreneurs – 4. Save Incorporation Costs
A limited company must be properly created in accordance with company law requirements and registered with Companies House. This process is known as incorporation. Although a company formation agent, accountant, solicitor or chartered secretary can be used to incorporate the company in return for a fee, it is possible and relatively straightforward to set up the business yourself. Guidance on how to do this can be found on the Gov.uk website at www.gov.uk/limited-company-formation/register-your-company. A company can be registered online if it is limited by shares and it uses the standard article of association (also known as the ‘model articles’). This service costs £12 and the company is normally registered within 24 hours. The same service can be used to register the company for corporation tax and to register for PAYE.
It is also possible to register a company by post using form IN01. The stated timescale for postal applications is 8 to 10 days and the service costs £40. A same day service is available as long as the application is at Companies House by 3 pm. This service costs £100.
However, you may wish to seek professional advice prior to setting up a company, particularly as regards to what is the appropriate share structure for your business to facilitate the tax efficient extraction of profits.
Save Incorporation Costs.
Bill investigates the process of setting up a company for his new business. He wants to keep costs to a minimum and uses the online incorporation service offered on the GOV.UK website. This is straightforward to use and costs him only £12.