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How do I set up a limited company for contracting?
Posted Jul 25, 2012
Once you've decide to set up as a limited company contractor, the process of forming a limited company is fairly straightforward.
All company formations are registered at Companies House, the registrar of companies in the UK, regardless of whether you use an accountant or formations agent to take care of the set up process.
Company formation steps
1) Choose a company name, taking into account the various naming rules - clearly the name cannot be too similar to an existing name on the register, nor can it breach other company's trademarks. Companies House also has a number of 'sensitive names and expressions' which you should avoid.
2) Choose company personnel (One or more directors, and a company secretary if you wish to appoint one). A company can be run with just a sole director since the implementation of the Companies Act 2006.
3) Decide upon your shareholdings (If you are splitting the shares with another person, otherwise you will own them all)
4) Provide company officials' names, addresses, dates or birth, and other details during the application process.
5) Submit several forms to Companies House - including a Memorandum of Association, Articles of Association, and completed Form IN01.
When completing Form IN01, you will need to have certain information to hand, including the registered office address, names and addresses of all company officers, and a statement of capital. Model articles of association can now be adopted upon incorporation, and the memorandum of association now simply shows the agreement by the company's subscribers to form the company and become members.
Can someone set up my company for me?
There are three ways to set up a company - directly via Business Link (web incorporation for a mere £18), via paper filing for £40, or via electronic software filing - which is used by intermediaries filing on your behalf.
Many contractors opt to use a company formations service (such as Duport) which takes care of the whole process on your behalf, or set up a company via their contractor accountants. This is very much the hassle-free route, and shouldn't cost a great deal. Some accountants may include the costs of forming your company in their standard monthly fee.
- You can set up a limited company right away via our long-term company formations partner, Duport.
- Try our full guide to setting up a limited company.
- You can access the Companies House guide to company formation here.
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