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Education How much does it cost to register a company?

Discussion in 'General' started by Weekly_Estimate, 27 Feb 2012.

  1. Lorquis

    Lorquis lorquisSpamCount++;

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    Right, as someone who's just started a business this the way I'm going to go for deciding..

    1) Good credit rating?
    2) More than you running the company?
    3) Employing anyone through PAYE?
    4) Turnover of over £70k? (ie needing VAT registration)

    If the answer to more than one of them is yes, then go LTD, is only yes to 2) then register as a partnership or LLP (depending on who it is)

    I've registered as a Sole Trader for now as for me, the answers to all of them are No..

    Have a look on businesslink, direct.gov, hmrc.gov.uk.

    Remember if you are registered as LTD, you can't just use the company's money as an extention of you own personal bank account. For LTD everything you buy that you intend to claim back for must be 'Necessary and Exclusively for the business', sole trader just needs to be 'necessary' for business use..

    Also if you're a bit useless with getting things in on time or getting things absolutely right, don't register a LTD company, if you cock up on anything submitted you're liable for HUGE fines and potentially prison time, bankruptcy and being put on a director's blacklist. Not good things.

    Any questions, drop me a PM and look at the sites I suggested.

    (but as an aside, you can register with company's house for about £20)
     
  2. Carrie

    Carrie Multimodder

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    You don't have to but since you were asking for information, it's easier to get good advice if they know the parameters. And since you were asking for information politeness always goes down well :thumb: even if you don't want to share :p

    But your financial liability under a limited company is (or was when I had one a wee while ago) limited to the value of the shares, hence why people would "issue" a small number at a nominal value. Yes you can be blacklisted etc. if you screw up big time but, assuming it's all legitimate, in this current economic climate you won't be getting ready credit from financial institutions, suppliers etc. anyway as a newly formed company with no trading history.

    And the quickest/easiest option for a limited company is to buy one "off the shelf" which already has mems/arts/co sec etc. and has therefore already been registered with Companies House. You can always rename it afterwards.

    Edit: To search to determine whether the name you want to use is already in use (and therefore unavailable to you) check here http://www.companieshouse.gov.uk/
     
    Last edited: 27 Feb 2012
  3. Fizzban

    Fizzban Man of Many Typos

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    Can't the guy just want to have a company even if he never intends to do anything with it? Stop hassling the bloke.

    Besides..maybe he wants to sell sex toys and doesn't want us to know :naughty:;)
     
  4. saspro

    saspro IT monkey

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    Ahh. The "Lock, Stock" business plan
     
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  5. Carrie

    Carrie Multimodder

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    Unlikely, think of the custom he'd be passing up on bit-tech by not telling you ;)
     
  6. julianmartin

    julianmartin resident cyborg.

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    lolz! win.
     
  7. Fizzban

    Fizzban Man of Many Typos

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    Not much considering men are born with hands. We were born good to go!
     
  8. Lorquis

    Lorquis lorquisSpamCount++;

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    Maybe Carrie was thinking so you'd actually please someone else... ;)
     
  9. smc8788

    smc8788 Multimodder

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    I'm sure his master plan will be revealed if we see a "Big Mike's safes 'n' fleshlights" opening up somewhere soon :D
     
  10. Fizzban

    Fizzban Man of Many Typos

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    It is remarkable what you can achieve with what god gave you. But if a lady needs some vibration in her life, why not? ;)
     
  11. Carrie

    Carrie Multimodder

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    Or what you else could achieve, or want, if you have the imagination! :naughty:
     
  12. Fizzban

    Fizzban Man of Many Typos

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    Imagination is important, but effort is key. :naughty:
     
  13. AoE

    AoE What's a Dremel?

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    Least he could of done for the kind answers he was given.....was explain the big business venture? maybe he's selling spacesuits to Richard branson's Virgin Galactic customers?

    jokes asides, I am genuinely interested in knowing the nature of this business
     
  14. Unicorn

    Unicorn Uniform November India

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    Jokes aside, I am genuinely not.

    This:

    Sounds about right to me.

    If you're starting a business at 21, asking for advice on how to start it on a message board, admit that the business will not be making any money but that money will be flowing through the company account and refuse to say what the nature of the business actually is... I'm out.
     
  15. Dreamslacker

    Dreamslacker Minimodder

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    I am not sure how relevant this is to where you are but locally, we follow the commonwealth system in general anyway so here goes my experience with a Pte Ltd:

    You have a paid up capital that needs to be honoured just about at all times. That is to say, you need to have enough floating cash and/ or hold enough assets with value equal to or exceeding outstanding debts and the paid up capital.

    There is something called asset depreciation that is calculated at the end of the fiscal year.
    Your assets usually do not gain value unless they are part of your inventory in a company where your income actually comes from holding inventory that rises in value as it ages. i.e. Chinese tea leaves/ antiquitites that actually gain value as time goes by.

    For me previously, I setup a cybercafe with $10,000 of paid-up capital and $80,000 of loans from directors (this is reflected as amounts owing to directors and it is a debt). My assets were the computer hardware.
    At the end of the fiscal year, the depreciation in value of the computers and furniture need to be accounted for. On a 2 year depreciation scale, this means that the computers' worth drops by 50% every year that goes by until it hits zero value at the end of 2 years.
    So at the end of the first year, my hardware originally priced at $70,000 is considered to be worth $35,000. My outstanding debts to the directors and the paid-up capital must not total to be more than this value.

    Just because a Pte Ltd is limited liability by its paid-up capital doesn't mean that you can drive the company to the ground and expect only to pay for the paid-up capital. Creditors can sue the director(s) for any outstanding debts because the directors are liable for all outstanding debts when the company becomes insolvent (when asset worth is less than debts + capital).

    In my case, the only debts are only amounts owing to directors, then the directors may write off the debts. This is equivalent to a director absorbing the debts of the company to put it out of insolvency. Hence, it is seen as that the director takes the liability of the outstanding debt and clears it. It is not illegal but it generally reflects badly on the directors (it shows that you cannot manage a company well enough to keep it afloat).

    You will also need a company secretary. This is not a personal assistant. For Pte Ltd, this is a certified public accountant who will sign-off and certify true copies of documentations needed including but not limited to AGM reports and financial reports. They are also generally required to certify rue copies of directors' identification when applying for bank accounts. Hence, you must have a secretary before you even get a bank account. The fees paid will be borne by you and you must file it as professional/ financial services fees claimed from the company after the account is created. You can either write off the amount or claim it from the paid-up capital but it should still be filed into the financial report either way.

    Despite the title, the CPA are not obliged to perform the accounts for you unless you pay them separately for this service. Over here, for a sole director (P/L with only 1 director), the director cannot also be the secretary. It is likely to be the same over there. You need at least 2 directors if one of them is to be the company secretary.

    On accounts. Unlike a business, all accounts must be kept in order AND sorted out. In a regular business (self-employed profession) you can lump all your expenses together and your revenue together then submit the difference as your net profit/ losses as your income.

    In a Ltd company, these are all separate.
    Expenses for furnishing must be filed under furnishing and things like hardware must be filed into fixed assets because they are considered assets. Expenses for consumables are filed as misc. expenses.
    There are also categories like transport, gifts and entertainment and meals. All are separate and there are generally limitations on what is allowed to be filed under these.
    Eg. Over here, you cannot file tobacco/ alcohol expenses under gifts and entertainment even if you did spend the amount with receipts to prove it entertaining clients/ suppliers.

    On your question about having the company purchase items on your behalf, you can do so but you must document the process via receipts or invoices. It is not a good practice but there are situations where this is beneficial. E.g. You want to purchase samples/ items from another company that strictly does not sell to end users.
    In this case, your company makes a purchase and the item becomes an asset. It will then resell the item to you at the same or higher price. This removes the item from the list of assets and is proven by a receipt or tax invoice that you must sign off on. Otherwise, the company is legally still the owner of said item and must be able to present the item at any time if debtors arrive with a writ-of-seizure.

    If you are starting out on your own, I suggest that you setup a business (sole proprietor or LLP) instead of a Ltd company because there are overheads involved. Don't forget that you get double taxed in a Ltd company -> First for corporate taxes on company profits then on income tax where dividends are paid out.
    You can't just pay out profits directly because this are assets of the company; they are either paid out as capital returns, amounts owing to directors, fixed amounts as directors fees determined at the start of the fiscal year or dividends paid out to shareholders.
     
  16. Carrie

    Carrie Multimodder

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    Can't be b). You don't actually need to set up a company to print company cards. After all, who's going to check it really exists? Well, okay, I would, but that's just me :p

    No, ability is key! :naughty:
     
  17. saspro

    saspro IT monkey

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    I meant pulling out a Company Credit Card.
     
  18. Carrie

    Carrie Multimodder

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    Ah, well you didn't say that. They're only impressive when they're black anyway :p
     
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  19. noizdaemon666

    noizdaemon666 I'm Od, Therefore I Pwn

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    Really? :naughty: lol
     
  20. Carrie

    Carrie Multimodder

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    Bad Noiz :nono:
     
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