You have been considering opening your company for a while now, you have detailed research and have finally taken the plunge and set up your own limited company, but what comes next?
In this blog, we will review the top 10 things you should do after setting up a limited company to help make your journey a little easier to navigate.
1. Know your Articles of Association
To register your company with Companies House, you will need to decide on which Articles of Association your company is to follow. These articles are the written rules by which your company will be run, and these are agreed by the officers of the company upon incorporation.
You can choose between model established by the Companies Act 2006 or bespoke articles you have created. Before, or indeed after registration, familiarise yourself with what is stated within the articles to better understand directors’ powers and responsibilities, shareholder rights and how decisions can be made, and the general administration arrangements for your company.
2. Set up a business bank account
It is recommended to open a business bank account as the company is considered its own separate legal entity, and therefore finances should remain separate to those of the officers.
You can approach your current bank for a business account or research other banks and benefits that they may offer. Different banks each have their own requirements for opening a business bank account, and they will require certain information before setting up the account, which can include:
- Proof of ID and address
- Certificate of incorporation or company number
- Proof of your registered office address
- The details of all the officers of the company
- The Standard Industrial Classification (SIC) codes of the company
3. Get set up for Corporation Tax
Corporation Tax is charged at 19% on chargeable company profits by HMRC. Upon registering your company with Companies House, HMRC will issue a Unique Taxpayer Reference (UTR) number to the registered office address. It is important to follow the instructions on this letter to finish your registration for Corporation Tax, especially if you plan to start trading with your company straight away. If you do not trade straight away or are planning to trade after being dormant, you must notify HMRC within three months of starting to trade.
4. Make a note of your filing dates and set reminders
There are certain filing requirements and deadlines to remember including;
- Confirmation statement
- Annual accounts
- Corporation Tax payment
- VAT returns (if registered)
All filings need to be completed annually and can cause serious financial or legal repercussions if they are not filed in time, including the compulsory dissolution of your company. Be sure to note your deadlines and prepare these in advance to avoid any penalties.
We can assist you with confirmation statement filing and wider company secretarial assistance. We can also refer you to our accounting partners for assistance with accounting and taxation. For a free, zero obligation referral, please contact us here.
5. Put yourself out there
The world of business is a competitive one, especially for new small businesses. To help make the company a success, you need to promote yourself to your new potential client base. To identify your client base, consider the following:
- What does your company have to offer?
What is your company offering your potential clients, and why should they choose to go with you over one of your competitors?
- Who is your target audience?
What is the demographic of the customers you want to attract? What are their age ranges, location, gender etc?
- How are you going to reach this target audience?
What type of advertising and social media is going to work best for your identified demographic?
To thrive, ensure that you are promoting your company to the right consumers. To do this, create social media pages consistent with your brand to interact with customers to build engagement. If you are a tradesperson, consider joining an online trade directory to help connect you with customers. If you are going to sell products online, consider where you can sell and promote to access all customers.
6. Think of a business plan
Drafting a business plan, even a rough plan to start with, can help piece together an idea for how the company should progress. A good business plan will establish your business idea, potential risks and rewards, time based and realistic goals, assess your financial plans and measure progress. This type of planning is essential to progress in the first year of business.
7. Think about whether you need to register for VAT
Registering for Value Added Tax (VAT) is something all businesses must do if they are going to, or have already, exceeded the VAT threshold of £90,000 taxable turnover. That threshold may seem like a far away goal when you first start your business, but before you meet the threshold there are other reasons why people voluntarily register for VAT. These can include:
- Reclaim VAT on goods or services sold by other VAT registered businesses
- Enhance your company image and credibility
- Appear more established and encourage other businesses to work with you.
There are also drawbacks to voluntary registration, including increased prices for your customers and complex business administration and regulations.
Make sure you regularly review your income to ensure you register for VAT registration as and when required. We can assist you with the help of our trusted accounting partners should you wish to register for VAT. To find out more, click here.
8. Know how you are going to get a salary
If you are planning on paying yourself a wage, it is best to know early on which way you want to do it – pay yourself a wage, receive dividends or a mix of both.
To receive a salary, you will need to register as an employer with HMRC for PAYE. You can pay yourself through monthly payroll submissions to HMRC, which detail earnings and tax deductions based on their monthly earnings.
Dividends are paid from a company’s profits to shareholders, often quarterly or annually. You should confirm what the Articles of Association say about dividends or shareholder rights.
Each option has different tax implications so research which option is best for you and speak with your accountant. For more information from the Government website, click here.
9. Keep accurate records of your accounts
Keeping accurate records of your accounts is vital to calculating tax owed to HMRC and submitting full records to HMRC and Companies House.
It will also help you keep track of your income and expenditure, to track whether you are making a profit or a loss, and to what extent.
You must keep records of income and expenditure, other documents including bank statements, assets owned, debts owed, stock and goods bought and sold. This will allow you to monitor whether you are making a profit or loss, and to what extent.
10. Enjoy your new business
It is normal to feel overwhelmed and uncertain about the future after incorporating a new business. However, you just need to remember why you set up your company in the first place, and the dreams you have for it. Make a plan, take a breath, and enjoy your new adventure.
Next Steps
Looking for more information to get started? Browse our starter guide and checklist.
Not registered a company yet? Look at our incorporation packages here.
