What Is The Cost Of Setting Up A Limited Company In The UK?
Setting up a UK limited company is easy, but knowing the cost is helpful. These expenses could vary from minor filing fees to possibly additional charges based on the requirements of your company. This blog will give you a comprehensive overview of the steps required to form a limited company in the UK, along with information related to the cost of setting up a limited company.
What Is A Limited Company?
When someone owns shares in a limited company, their responsibility is limited to the amount of money they put into the business. Because of this setup, if the company gets into debt, the personal assets of the shareholders will be protected. There are two kinds of limited companies: private and public. A private limited company (Ltd) is the most popular type for small businesses.
Cost Of Setting Up A Limited Company:
What is the cost of setting up a limited company? To set up a limited business, you must pay a filing fee to Companies House. Thankfully, the price isn’t too high. Formally setting up a limited company costs £34 if done online and £62 if sent by mail. To make your company legal, you must file incorporation papers, which cost money only once.
- The usual fee to sign up online is £34.
- The standard fee for postal registration is £62.
You can use the Companies House website to register yourself, or you can use an online service.
Additional Services and the Cost Of Setting Up A Limited Company:
There is a small cost of setting up a limited company, but there may be other costs that businesses need to think about when they start one. These costs can vary depending on the specific needs of your business. As a business, you need to have an address in the UK for your listed office. This address is where official mail from Companies House, HMRC, and other formal bodies will be sent. It is important to keep cash records from the very beginning. Some business owners like to handle these things on their own, while others choose to hire an accountant.
If you have more than one starter or shareholder, you may need special shareholder agreements and articles of association. These formal papers spell out the rights of shareholders and how your business is run.
To keep your personal and work funds separate, you need to open a business bank account. Numerous banks in the UK offer free business accounts. However, some may charge a regular fee based on their provided services. These fees can range from £0 to £20 per month, depending on the benefits provided by the bank and the account.
Websites are increasingly vital for businesses, whether for marketing or direct sales. It costs about £5 to £20 a year for a domain name. Simple hosting can cost between £3 and £10 per month. To create a website, you can pay anywhere from £500 to several thousand pounds, based on how complicated and full of features your site needs to be.
If you own a limited company, you will require business insurance such as employer’s liability or public liability insurance, particularly if you employ people. Business insurance costs can be unique based on the type of business. It may cost between £100 and £1000 annually, depending on the size and nature of your company.
To protect your brand, you may need to file trademarks, patents, drawings, and other forms of intellectual property used in your business. It costs about £170 to £200 to register a trademark. On the other hand, patents can be pricier, often costing £500 or more, based on how hard the process is.
Cost After Setting Up A Limited Company:
You need to keep these costs in mind once your business is up and running:
Statement Of Confirmation Every Year:
It takes £34 to file this online or £62 to mail it.
you can check on Government website:
Corporation Tax:
Corporation tax is a tax that limited businesses must pay on their income. To avoid penalties, businesses must file their tax returns on time. The main rate for companies with profits over £250,000 is 25%.
VAT Registration:
If your business makes more than £90,000 a year, you need to register for VAT, which has costs associated with it.
Conclusion:
It is effortless to start a limited company in the UK, and at the beginning, it is not costly. Businesses also have other costs, such as legal advice, budgeting, insurance, and a website. Depending on the needs of the organisation, the total cost of setting up a limited company can be unique. If you plan carefully, setting up a limited company could be an inexpensive and effective way to start your business with minimal personal liability. Understanding the expense will enable you to make a budget and have your new limited company poised for success from day one. Whether you hire lawyers and accountants or use an online tool to set up a company, you must take into account start-up and ongoing costs to keep your firm legal and running smoothly.
Disclaimer:
Please remember that this piece’s information is just for general knowledge. It is not legal, tax, or professional advice. We do not hold any responsibility for any loss or damage. Seek advice from a legal consultant.