
How to register a company in the UK - lancashire
http://swombat.com/2012/1/7/how-to-register-a-company
======
tomgallard
My accountant did the company registration free for me. I'd caution against
doing it yourself unless you know exactly what you are doing.

This is because, although the company creation itself is pretty simple, there
are lots of legal requirements that you need to get right, and plenty of
details you want to get right first time.

Just as one quick example- if you've been operating as a sole-trader, you'll
probably find that there's a significant tax saving to be made by selling the
goodwill and any other assets of the sole-trader to the Ltd Company. If you've
been going a couple of years, this is likely to save you thousands in tax.

I don't believe its realistic for a trading Ltd company to deal with its tax
affairs and annual accounts without an accountant (you may think you know what
you're doing- but if you make a mistake, be aware that HMRC will be not be
lenient on you just because you're not an accountant).

~~~
auxbuss
Frankly, that's silly.

It costs £18 to register a company online directly. You will be sent all the
appropriate forms and documentation in the post/mail. If you are at all
concerned, simply fill in the form that declares the company as dormant until
you are ready to trade.

That's all you need to do.

Once you trade, then there are a few things to take into account. However, at
that point you are a director, and the folk you deal with at HMRC are a whole
different bunch to the folk you deal with as a "mere" employee. They will be
informed, and bend over backwards to assist you.

Contrary to your belief, trading as a limited company without an accountant is
easily accomplished. Personally, I wouldn't recommend it, since an accountant
can usually pay for himself in the saving he brings. But that doesn't negate
the fact that it can be done without too much pain.

~~~
tomgallard
I'm sorry- I think you're wrong on this, and your advice is potentially quite
dangerous.

If you're going to register a dormant company, then yes, fair enough, do it
yourself.

However, if you're trading it is not easily accomplished. As a Sole Trader-
yes, its simple to do.

However, anyone who claims they can produce a full set of accounts, compliant
with UK accounting standards to the filling in of your CT600 and filing of
accounts with Companies House is likely kidding themselves.

Yes- you may think you're doing it right, but you're not going to know until 5
years down the line HMRC open an investigation into your company and set
someone who knows what they're doing onto your records.

Are you willing to take that risk with your business- cos I'm definitely not!

Yes HMRC are helpful, but they're not going to produce your accounts for you.

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yalooze
After looking around I used the Bronze package from Companies Made Simple. It
ended up being slightly cheaper then using Companies House direct (my
understanding of which is that Companies House only charges formation agents
£14 per company). Both give you a PDF of the Certificate of Incorporation
which you can print off yourself for the bank if they ask for it, plus if
you're happy with Barclays the £50 cash back was pretty sweet.

~~~
kandu
I also used Companies Made Simple. Everything was fine with them, except that
if you have non-ASCII characters in your name they will look scrambled in some
of the official documents. Use an ASCII transliteration for your name instead
of using non-ASCII characters.

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jamii
I registered directly with Companies House a few months ago, after consulting
an accountant. It was completely straightforward. I don't see any need to use
a third party.

~~~
amouat
How did you choose an accountant? That's the problem I'm currently facing.
Actually, that would make a good swombat article...

~~~
tom_usher
I'm facing the same problem. I'm just out of education (in the UK) and
primarily doing contract work under my own name, I don't know whether getting
an accountant would be beneficial, and if so, how to find one that is best for
someone in my situation (and aiming to start up).

This sort of information about the basics is surprisingly hard to find, so
this article is particularly refreshing.

Makes me think, I'm sure many people (including me) would be happy to pay to
talk (IM) to someone who knows something about this sort of thing. Does this
exist as a web service anywhere?

~~~
amouat
If you're in Scotland, Business Gateway are meant to help new (small)
companies. They've been pretty useless with me so far though. I'll give them
another go later. Scottish Enterprise are supposed to help "ambitious"
(larger) companies.

I did find the following from them on finding an accountant:
[http://www.business.scotland.gov.uk/bdotg/action/layer?r.i=1...](http://www.business.scotland.gov.uk/bdotg/action/layer?r.i=1082154263&r.t=ONEOFFPAGE&site=202&topicId=1073963622)

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dav-id
"But before you can do that, you need to figure out which package you want.
The crucial factor is that in order to open a bank account, you will need a
printed Certificate of Incorporation."

This is not true. I have registered a few companies and not once did they care
about the printed certificate. They will call Companies House or email them
and confirm you are a director and the company exists.

Note: My bank is Lloyds TSB.

~~~
jamii
I opened a business account with Lloyds last month and they were happy with an
electronic copy of the certificate.

~~~
swombat
I've updated the article to mention this. Thanks for bringing it up!

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eberfreitas
Registering a company in Brazil is a hundred times more complicated and
expensive. Maybe some day I'll write a similar post...

~~~
olh
If I want to register my startup here in Brazil, I need to personally go to
five different places and wait more than a hundred days.

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scotty79
What is the simplest way for citizen of EU member state to create and manage
UK Ltd company without ever being to UK or owning anything else there (or
renting physical office)?

~~~
StavrosK
I'm a Greek citizen with a UK company, I created it in ten minutes on
companiesmadesimple.com, who also provide mail forwarding services, if I
recall correctly. The biggest pain is the accounting, but FreeAgent (the app
referred from the article) sounds good, and I guess 300 GBP a year isn't too
much for it.

~~~
jrmg
Out of interest, why did you decide to create a UK company rather than a Greek
one - or one in another country for that matter?

~~~
dejv
I don't know anything about Greece, but speaking of my country of origin
(Czech Republic) is quite a big problem to set up credit card payments, not
speaking about much bigger administrative burden and costly process of setting
up company.

~~~
StavrosK
As zerostar07 said, the bureaucracy alone makes it a nonstarter. In the UK I
get my personal HMRC contact, whereas in Greece you have to get up at 7 am and
only hope you will get whatever you want done that day.

Also, Greece doesn't generally encourage entrepreneurship that much. For
example, I can't email an invoice, I have to actually mail the actual physical
copy, which I have to write by hand, because I have a book of invoices stamped
by the Eforia (the Greek revenue service).

Plus, setting up the UK company took 15 minutes and as many pounds, whereas I
have no idea how much it costs in Greece. Friends who've done it told me to
stay away.

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ekpyrotic
Quick note, regarding "[c]ontrary to what some people will tell you, you can
have your business registered at your home address. You can do so even if your
tenancy agreement doesn't allow it (obviously, don't actually go out of your
way to tell your landlord about it). I don't know anyone who has gotten in
trouble because of this (though I'm sure you can find some rare examples if
you try)."

I use to assess people for risk at a premier London estate agent.

We would have discovered this in our research via Company House, and if it had
infringed your previous tenancy agreement (which it usually would have) we
would have: (1) declined any potential tenancy outright, (2) told the future
landlord that you had operated a business out of your previous address, and
(3) left the final decision to the future landlord.

In the same job, I saw CCJs and Bankruptcies filed against the Landlord's
property (when businesses went bust with debts to their name) because
inexperienced estate agencies and property management agencies didn't properly
vet their tenants.

~~~
ryanwaggoner
How ridiculous. If you want to run a steel mill out of your kitchen, that's
one thing, but not allowing someone to write some code for a side business in
a spare bedroom?

I own multiple rental properties and these scenarios are the least of my
worries.

Plus, how would a risk check know what was part of your previous tenant
agreement? Do people in the UK submit their previous lease with each
application?

~~~
ekpyrotic
Ryan, firstly, operating a business out of a tenetted address would not have
been a concern, using that address as the registered address on Companies
House would be. That can result in serious legal implications for the Landlord
at a later date.

Quoting from HMRC:

"If your company or organisation's registered office is in England, Wales or
Northern Ireland, HMRC will take action to recover what you owe. This may
include:

(i) visiting your business premises to obtain payment or seize your business
assets and sell them at auction

(ii) taking legal proceedings to collect the debt through the courts

(iii) in some extreme cases, applying to the court to have your company closed
down

Remember interest is accruing from the date your Corporation Tax was due until
it's eventually paid. This is on top of the Corporation Tax you owe."

The procedure would run as follows: (1) if the applicant has reported himself
as self-employmed, we check whether he is registered as a Ltd. company on
Company House. If so (2) we ring the previous landlord and check on any formal
or informal agreement regarding using the property as a company registered
address.

Our agency was being paid 10-15% of the annual letting fee for letting and
managing properties, to my mind checks like these have to be made.

Edit: Usually if you do not have a respectable registered address, you should
(1) use your accountant's address with his/her permission, or (2) pay for the
services of an umbrella company.

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carbonesc
I would advise that before people rush to register a Limited company they
should consider operating as a sole trader. A sole trader can open a bank
account, employ people, rent an office, register trademarks etc.

Also search thoroughly for your proposed company name to check for existing
businesses with similiar names or trademarks. And you will probably want a
domain name to match.

~~~
teamonkey
I would think the opposite. As a sole trader you're personally liable for the
company. Above a fairly low threshold for income you have to be VAT registered
as a sole trader anyway, which is the biggest headache. If you already get an
accountant to do your books I see no reason at all to be a sole trader.

~~~
carbonesc
You only have to register for VAT if your turnover reaches about 70,000 UKP
[1]. I guess there are many people reading HN who will be running a business
that will not immediately reach this level. Incorporating a limited company is
not the only way for them to set up a business, which was the impression given
by the article:

"If you're trying to create a business, rather than just create a legal outlet
for your freelancing, you will need a Limited Company."

I am just suggesting people weigh the alternatives of limited company vs sole
trader. The minimum viable form of business is the sole trader. It is possible
to convert from sole-trader to limited company at a later stage. Certainly
consult an accountant and consider the cost and tax implications of both
approaches.

When there are going to be multiple owners of the business from the start I
would agree that a limited company gives clarity to your relationship and is
probably better for this reason.

[1] [http://www.hmrc.gov.uk/vat/forms-rates/rates/rates-
threshold...](http://www.hmrc.gov.uk/vat/forms-rates/rates/rates-
thresholds.htm)

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jmaskell
"As part of the company registration process, you might be tempted to come up
with a lofty valuation for your shares. Don't. You'll only cause yourself
hassle. Create 100 shares of £1 each and assign 1 share to each equal
cofounder. You can change those numbers to reflect however you decided to set
up the company. If you want to implement vesting, close this web page and get
in touch with a solicitor."

This isn't the case if you register through Companies House - you have to
allocate all share capital.

I found this out when using their online registration service recently -
according to my accountant it's a change from the Companies Act 2006.

The Companies House registration service is definitely worth using - you'll
probably get your company set up within an hour or two of filing the form.
Unless you have a complicated shareholder agreement (in which case you really
should get yourself a good lawyer if you don't already have one) the default
Articles of Association will be fine for you.

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mcdowall
Has anyone a good recommendation for setting up a US company for someone based
in the UK (or anywhere else)

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dav-id
One more thing I would like to add to this discussion is that if you register
a company and are not based in Britain you will need to send notarised copies
of your passport and bank statements (less than 3 months old).

This is the case if you are a director with 25% or more shareholding in the
company. You are not required to hold a visa or visit the country.

This is my experience recently registering a company with two other people - I
am British and the other two are Indians. I was present at the bank and
registered for the account whilst the other two were overseas. Some couriered
documents were required with the notarised documents as mentioned above,
additionally they were required to complete a form which they signed.

They have full access to the account - online and offline - in the same way I
have.

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zerostar07
How is the UK better compared to other competitive EU jurisdictions like
Ireland, Luxembourg and Cyprus?

~~~
patrickk
I've linked to this a lot in the past on HN, but the World Bank has a
_fantastic_ comparison on the ease of doing business in different countries -
one of the sections is "Starting a Business". You can see the comparison here:

<http://www.doingbusiness.org/rankings>

I highly recommend downloading the excel sheet, makes filtering by country
easier.

One of the biggest advantages of choosing Ireland is the low corporate tax
rate of 12.5%, compared to 21-26% in the UK (this is according to Wikipedia,
not sure what the current rate is there to be honest). This is the reason many
US tech giants, big pharma etc. locate in Ireland.

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jot
Any thoughts on this service:

<http://golimited.co/>

It was recently launched as a side project of startup I know in Brighton, UK.
Seems super cheap.

~~~
scq
How can it be so cheap? That's less than what the Companies House charge.

Perhaps they're operating at a loss to try and attract customers for their
online accounting service.

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keys1234
This may be less relevant to the topic, can anyone point out how to start a
company in India (I am a Indian citizen). Your help is appreciated.

~~~
kamikazi
Forget that you even read this article then. Subtract all the simplicity,
multiply the hassles by 1000, and double it up, maybe once more. Allow the
whole thing to stew on slow flame for months (not days) and probably now you
are close to the ground reality of incorporating in India.

Practicalities: You have to contact a RoC agent (Registrar of Companies)
who'll get this done for you. Depending on the type of your
entity/incorporation (sole proprietorship, LLC, LLP, Company, One person
company etc) the fees, time and documentation required will vary. For basic
info check out <http://www.mca.gov.in/> (Min of Corporate Affairs).

Beware though, really the incorporation process in India sucks donkeys balls
and exhales horse farts even when going through agents.

If you want I can refer an RoC agent who presented at one of the weekend
startup-meetings in Bombay. Sounded intelligent and well-versed with issues
related to startup incorporating. My email is in my profile.

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andyking
I'm not looking to set myself up as a company, but just out of interest,
what's the difference between registering yourself and buying an off-the-shelf
limited company? I've known people do it both ways.

If getting yourself registered as a brand new company is so easy, what are the
advantages of buying an empty limited company and changing its name? There
must be some, or people wouldn't do it.

~~~
jmaskell
There are two main advantages to buying an off the shelf company:

1\. Having a company that appears to have been around for longer than it
actually has (although it's pretty easy to find out it's history - e.g. when
directors changed).

2\. Getting the company name that you want. There are a number of people that
form companies and register them as dormant just to squat on the name - just
like people do with domain names.

Edit: forgot to add:

I'd recommend registering a fresh company. It's quick and easy. Buying a
company, changing directors, making sure there's no awful legal history with
it etc probably isn't worth the extra cost or effort. It's nice to have a
clean slate to start with.

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ig1
If you're going to be getting an accountant anyway, many accountants will do
the company registration stuff on your behalf for free.

~~~
swombat
I'd advise against that, because it buffers you from knowing just how simple
it is - and gets you in the habit of wasting money getting accountants to do
things which you can do yourself in 10 minutes.

~~~
StavrosK
Do you know if I can file my own taxes? I keep everything in QuickBooks, and
my company isn't really making enough money to justify spending thousands on
an accountant. I wonder if I can do my own return, but the HMRC site is not
helping.

On the other hand, I wonder if I can just register as a sole trader, invoice
my company and enjoy the free tax bracket, as I didn't make more than that
last year.

~~~
tomgallard
Theoretically- yes you can. In practice NO NO NO!

An accountant shouldn't cost more than 60 quid or so a month for a Ltd
company. It will pay back the investment many many times over if he's even in
the least bit competent.

On the specific question about registering as a sole trader - no this isn't
the way to do it. You should be paying yourself a salary from your Ltd Co to
make use of your tax free allowance. Even if the Ltd Co hasn't got the cash to
pay you- this is still fine, as you will build up a balance in the Directors
Loan account which you can draw down on when you need to.

~~~
StavrosK
Ah, thanks for the advice. I considered paying myself a salary, but then I'd
have to register and pay for employee benefits, no? That's just wasted money
for me, since I don't live in the UK :/

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TestUser123
Anyone here who is using a UK company while not based there?

Supposedly there are some additional requirements when you're controlling a UK
company from abroad. I'm interested in establishing an additional company for
some of my ideas but am based in a country which requires high start up
capital (Germany, Italy, Belgium, ...).

Anyone familiar with this?

~~~
jaakl
It is easy to get company registered, the issue can be getting a bank account.
I have seen that UK banks do not trust a company if sole Director is a foreign
company, even if from another EU state. Some have told that it is easier if
Director is physical person (even if from another country). So yes, expect
challenges.

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topbanana
Freelancing is a business, and a limited company is nearly always the best
way.

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AdamGibbins
Done. Hardest part - picking a name.

Thanks swombat, I've held registering for a fair while now. As you say, simply
because I wasn't 100% sure how to do it.

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xxqs
here I covered similar topics for Switzerland, if someone is interested.

[http://www.swinog.ch/meetings/swinog20/p/Swinog20_Starting_a...](http://www.swinog.ch/meetings/swinog20/p/Swinog20_Starting_as_IT_Contractor.pdf)

In general, the Swiss company registration is a bit more expensive, and there
are certain obligations.

~~~
AdamGibbins
You recommend GoDaddy? :)

~~~
xxqs
in June 2010 it was OK to recommend it :)

I actually still use it for some DNS hosting

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geuis
Is there an equivalent article on incorporating in the US?

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vijaymv_in
Thanks for the details

