Setting up Ltd company

[ToffeeLady]

I have looked at this website as I need to set up a ltd company - Urgently as the contract starts next Tuesday!! If I go through other companies they want to charge a hell of an amount & monthly after that, which I cannot afford. I am able to do my own accounts/tax as I have long time financial experience.

I have a problem - I cannot issue a personal cheque to the value of £1.00 to set up the business bank account as my account does not have that facility - why not - ask Santander!! But can I send a Postal Order to that value of higher? If so what name do I put it in?

Please can someone advise quickly by return or I may lose this contract - I do not wish to do this as I have been unemployed for over 2.5 years..

[Safe Collections]

I have looked at this website as I need to set up a ltd company - Urgently as the contract starts next Tuesday!! If I go through other companies they want to charge a hell of an amount & monthly after that, which I cannot afford. I am able to do my own accounts/tax as I have long time financial experience.

I have a problem - I cannot issue a personal cheque to the value of £1.00 to set up the business bank account as my account does not have that facility - why not - ask Santander!! But can I send a Postal Order to that value of higher? If so what name do I put it in?

Please can someone advise quickly by return or I may lose this contract - I do not wish to do this as I have been unemployed for over 2.5 years..

Try:

https://golimited.co/

£13 all in!

Good luck

[northernladuk]

Have you got an accountant? Why not get them to do it?

[ToffeeLady]

If I use the golimited - can I still use my own bank account for payments to be made into it - or do I have to set up a separate account?

[northernladuk]

If I us ethe golimited - can I still use my own bank account for payments to be made intoit - or do I have to set up a separate account?

If you do this all the money going in to your account will be taxed to you personally. The business bank account keeps the money and taxation away from your personal affairs. Mixing them is going to be complicated and costly.

Get an accountant and speak to him urgently. He will advise the best way out of this.

I guess you won't be billing the client for the first month and not getting paid until a couple of weeks after so isn't a biggie at this point is it?

Get an accountant.

[northernladuk]

Why a limited company needs its own bank account

It is not a specific legal requirement that a company opens and runs a bank account in its own name, and where a new company has been formed to take over an existing sole trader business, it can be tempting to continue to use the business bank account that has already been set up for that business.

However, we strongly recommend that every company opens its own separate bank account and uses it to process all the company’s transactions, for the following reasons.

Often when an existing business is transferred to a company, the formalities of the change are handled less than perfectly. For example, there may be no formal documentation of the transfer of assets, the sales invoices raised by the company may not make it clear that the sale is now being made by a limited company, and suppliers may be slow to update the details that appear on their invoices. This carries a risk of HMRC arguing that the business has not been transferred, with a view to taxing the business at a higher rate. Having a company bank account being correctly set up and used can act as a counter-argument.
Where a person is holding money on behalf of the company, he is borrowing money from that company. This is likely to be the case where a person’s own bank account is being used as a company bank account and the account is in credit, even if the only transactions on the account are company ones. Borrowing money from the company can be illegal under the Companies Act 2006. It can also lead to additional tax liabilities in the form of Section 455 tax, and tax and National Insurance on beneficial employee loans.
If the business is unfortunate enough to be subject to a tax investigation, all of its records and bank accounts will be reviewed. Once HMRC discover that a personal bank account is being used for company transactions, they may extend the scope of their investigation to the director as well.
If bank interest and charges have been paid on the account, HMRC may not allow tax relief on them on the grounds that they have not been incurred in the company’s name.
Where company funds are held in a private bank account, the distinction between the company and its owner is blurred. This may cause difficulties if the company becomes insolvent, and the owner wishes to rely on the principle of limited liability to avoid being held personally liable for any business debts. This would be particularly relevant with a bank overdraft, if there were no personal guarantee in place.
A properly set up company bank account should be an account held by the limited company in its own name, which in most cases means that “Limited” or “Ltd” should appear in the account name. It is not possible to “convert” a sole trader business account to a company account; a new account with a new account number is needed.

[Scruff]

Oh Dear...

Go to Companies House Website - Form Company 10 minutes & £15 done online.

Access Companies House Web Incorporation Service

This is all you need to establish incorporation and obtain the Ltd Company Number, vital for having the contract drawn.

after that... Go to HSBC and open a Business Banking Account - Free for 18 months and it takes about a week to get the account number. This doesn't matter, YET, since you will not likely see any money from the contract for at least 3-6 weeks after starting (depending on your Customer and/or Agency's payment cycle.)

Small business accounts

Then, get an accountant - plenty of advice here (from Bobs, Spuds and Sockies) on how to do so.

[Clare@InTouch]

An accountant should save you more than they cost you, in time if nothing else. Get an accountant, register for flat rate VAT and the profit will cover their fee. Happy Days

[Wanderer]

I am able to do my own accounts/tax as I have long time financial experience

Have you ever done the accounts for a small limited company including the year end? If you are not careful then you will make a mess of it, miss filing deadlines, set the company up wrong, get fined or pay a lot more tax than you have to. If you try to go with DIY accounting you will probably end up employing an accountant to do the end of year accounts anyway then you won't really save much money and you won't have the benefit of an accountant's advice from the outset.

Please don't ask us a load of basic questions because most people here will recommend you get an accountant, at least for the first year and then consider if you want to go with DIY accounting. There are a few accountants who advertise and post helpful advice on this forum, give them a call and have a chat.

Also, have a read of the First Timers guide on the right, it explains a lot of stuff that you will need to know.

[mudskipper]

All your questions answered here.

Good luck!