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W Accountancy Fact Sheets  -  Limited Company Formation Guidelines

Select a name. This must not be identical or too similar to a name already registered. The company may also have a separate trading name.

All companies must have a minimum of two officials. A director can also be Company Secretary but there must then be a second director.

A registered address must be provided to Companies House. This does not have to be the business trading address.

Companies have an authorised share capital (usually 1000 Ordinary Shares of £1 each at formation). There may also be different classes of shares. Decide on the number and class of shares to be issued and who the shares are to be issued to. By issuing different numbers and different classes of share it is possible to decide the level of income to individuals. It is not necessary to issue shares to all directors or the Company Secretary. The company must have a minimum of one issued share.

5.  Converting from a Sole Trader/Partnership to a Limited company.

The following points should be considered:

a) The levels of salary and dividends

b) The timing of dividends and the impact of tax credits

c) Timing of incorporation and final pre – incorporation tax bills

d) Extent to which profits will be retained in the company

e) Tax relief/charges for use of car for business

f) Tax charged on disallowable expenditure

g) Goodwill created on incorporation

h) If VAT registered should the number be transferred to the new company

6.  Incidental advantages of incorporation.

Schedule E exemption eg

· Mobile phones

· Computers

· Mileage allowance

· Training costs

· Corporate incentives

· Research and Development tax credit

· Tax relief for amortisation of intangibles

At W Accountancy Limited we can provide much more additional information and advise on the above guidelines.