Anyone ever started a limited company?

[Loz]

I'm looking to start a limited company for an internet business. Has anyone else ever done this from scratch (preferably not using an off-the-shelf company)? Any tips/lessons learnt?

[dbboy]

It's the same as starting as a sole trader, but with more restrictions and things that have to be complied with.

[DulwichFox]

Hi Loz .

I had a Limit Company back in 1993.

Its not that difficult but I did have the help that my business partner already had several other companies.

I have a couple of books that you can borrow.

Starting a Business for Dummies..

and

From Acorns (How to Build Your Brilliant Business from Scratch.

They will guide you through every stage of setting up your business and Limited Company.

Foxy

[Salsaboy]

Easiest way is an off the shelf company. Everything is done for you and you can change the name to suit. Any reason why you don't want to do that?

[Robert Poste's Child]

Mine's the off-the-shelf sort and pretty straightforward. If you need advice on the accounts/tax side, you could have a chat with Ray Coman of Coman & Co.

http://comanandco.co.uk/

[seemster]

Hi Loz, I can help if you have specific questions as I did loads of research into this a few years back and have helped other people out since then - so here's a starter for 10, sorry if some of it is repeated I have copied and pasted some of it from other emails I've sent people.

Only benefit I am aware of re: off the shelf companies is that you can pretend you have been established longer than you actually have.

No reason to pay anyone to set up the company - just do it yourself online with companies house.

Be sure you know the differences between a limited company not sole trader and why you want to go the limited route - it is definitely advisable in many situations but not always necessary.

The official stuff isn't hard, ie filing papers to set up a company and filing a return once a year with Companies House. It's all the ongoing regular stuff that can be a bit of a pain. PAYE/NIC payments, VAT payments, getting everything done in time for the accountant to file for you, checking what the accountant has drafted, thinking about what you pay for and what the company pays for, thinking about tax efficiency, buying equipment through the company, ensuring receipts are in order, printing everything out in case of an audit (eg buy something online and print out the invoice/receipt). Remember also, you do have director liabilities even though they are "limited."

Hassle can come from things like bookkeeping, receipts, (you hardly have any if you are a contractor but I have travel, equipment, business development/entertainment, stationery, subsidence etc) marketing stuff (design, make, buy, use, keep up to date), accountant costs and liaison with them for corp tax return as well as personal tax return, professional services when I outsource etc

So it requires a certain level of organisation/discipline - no big deal if that sort of stuff comes naturally to you but I know some people who were very used to being a "well looked after employee" who found the trials and tribulations of filing an annual company return too much effort! (I'm being sarcastic to make a point, it really is easy if you can be bothered...) It's just administration, so it's perfectly do-able for anyone who can keep a straight head and spare the time.

Here's a site I found the other day when looking up a specific question - there is plenty of advice out there, google is your friend, but I thought this site was well explained. http://www.companybug.com/form-a-limited-company/

I use complete formations for my registered office and have had no problems with them at all and find them reasonbly priced so if you did want to pay someone to set the company up for you I can recommend them (I have no other connection) I prefer to have a different registered office address from my home address so that my home address (which is my regular trading address) is only made public to people I am choosing to trade with.

I personally advise everyone to register for VAT even if your turnover is below the threshold as it makes you look like a more professional outfit, but suitability of that will depend on the nature of your business, I'm usually talking about corporate / professional services scenarios.

[Seabag]

There's a few loops to be explored

LTD is quite simple, but Sole Trader to LTD taxation liability/allowance wise, can be different. There's a point where you could sell your sole trader part to the LTD and recive a goodwill chunk in return, on top of your tax allowance as the LTD director

You can run a LTD and a sole trade co as seperate entities, in most circumstances

It's worth exploring all this before you take the leap

In the region of 20k as the allowance in year 1, isn't unusual

I'm happy to share my accountants contact details with you, he's in Crystal Palace and isn't expensive

[Seabag]

Also, i've had bigger trading entities and smaller. But accounting easiest (like now) is liberating

I've had:

Quick Books

EXcel

Sage

SAGE 40

And hated them all, because they're desiged for a certain amount of co-dependencey

We now use Kash Flow http://www.kashflow.com

All I can say is, thank fekk, where have you been all my life (for ?25 pcm)

It does invoice, delivery note, VAT, payment tracking, reminders and returns all in one. On i-pad, tablet, I-phone etc

Less staff in the office (1+ 1 part timer) and me. It's become the drive engine of our business, making everything more transparent

[numbers]

seabag - can I ask you if you have found any drawbacks to using kash flow? i like the sound of it. was it a smooth process to integrate data from the system you used previously? ta.

[Loz]

Thanks to everyone for their replies. Especially seemster - they are exactly the sort of tips I was seeking!

The main reason I was looking for a LLC is protection of my own assets. The 'company' would be to contain a forum similar to EDF and I don't want a random attempt to sue for libel to affect my own bank balance. I don't see the company making a whole lot of money (though hopefully it won't make a loss, either!).

So, almost certainly no VAT and will try to avoid PAYE/NIC by not paying myself. Would that be simple enough for me to administer myself or would I still need an accountant?

[ClareC]

Easy enough to do yourself as long as you are disciplined to do it..... Failure means fines!

Off the shelf and change of name simplest method.