Company formation in Fulham

Should you trade through a limited company

A limited company is a separate legal person. It owns its income, pays corporation tax on its profits and is responsible for its own debts, which normally protects your personal assets if the business fails. You take money out as salary, dividends or both.

In exchange, you get more admin. The company has to file accounts and a confirmation statement at Companies House every year, details of directors and shareholders go on a public register, and there are strict rules on taking money out. For a part time side business with small profits, staying a sole trader can be simpler. We look at your expected profits and plans before recommending either route.

What you need to decide before registering

Companies House needs certain details before it will register a company. Some are easy to change later, others less so.

• A company name that is not the same as, or too like, an existing one
• A registered office address in England and Wales, which goes on the public record
• A registered email address for Companies House to contact you
• At least one director, and details of anyone with significant control
• Shareholders, the number of shares and how they are split
• A business activity code describing what the company does

Getting the share structure right

Founders often accept a default of one share or one hundred ordinary shares without much thought. That can work, but it is worth stopping for a moment. If a spouse, co founder or investor is likely to be involved, how the shares are held affects who can receive dividends, who controls decisions and what happens if someone leaves.

Different classes of shares can give more flexibility, but they must have a genuine commercial reason and be set up properly, or HMRC may challenge dividend payments later. For two founders starting a studio in Sands End or a consultancy near Parsons Green, a simple shareholders agreement alongside the company formation can prevent a lot of disputes. We work with your solicitor where a more detailed agreement is needed.

Identity checks and privacy

Companies House now requires directors and people with significant control to verify their identity. This can be done online through GOV.UK or through an authorised agent. It is a one off check, but the company cannot be formed with an unverified director, so it is worth sorting out early.

Many people do not want their home address on a public register. You can give a separate service address for directors, and use a different address for the registered office. If you live in Fulham but plan to work from home, we can explain your options and point out where your home address would still appear.

Setting up with HMRC after registration

Registration at Companies House is only the first step. The company also needs to be set up correctly with HMRC, and the time limits start straight away.

Many new directors also forget about the first accounting period. Your first set of accounts usually covers the time from the date of incorporation to the end of the month in which the first anniversary falls, and the filing deadline is normally 21 months from incorporation. Corporation tax works on periods of no more than 12 months, so a long first period is split into two for tax. We map out these first dates for you on day one so nothing is missed.

• Tell HMRC the company is active for corporation tax within 3 months of starting to trade
• Register as an employer for PAYE before the first payday, even if the only employee is you
• Register for VAT if taxable turnover goes over £90,000 in a rolling 12 months, or earlier by choice
• Open a business bank account in the company name and keep it separate from personal money
• Choose an accounting year end and bookkeeping software

Moving an existing business into a company

If you already trade as a sole trader, turning the business into a company involves more than a new registration. Assets, contracts, stock and goodwill need to be transferred, your self assessment for the final period as a sole trader has to be dealt with, and there can be capital gains tax and stamp duty points to consider. Customers and suppliers need new invoice details too.

We plan the move so it happens cleanly on a set date. Send us an enquiry with a short description of your business and we will review it for free. You then get a fixed fee, agreed before any work starts, covering the formation and the HMRC setup.

Common questions