Forum - Online Registration of your business, good, bad and other suggestions

On line registration companies are mostly good IMHO and have a place to play in setting up a limited company. They know how to do it and for a small fee you can avoid having to find out all the legal issues for something you are likely to do only once.

However a few words of caution:

They can help get you a bank account but remember this is only an introduction. They cannot guarantee an account opening and this is not a way to avoid any issues you may have with a bank due to past bad credit history

They do not help with all of the HMRC registration such as:

- the completion of the CT 41G form which needs to be filed at HMRC within 3 months of starting to trade
- vat registration if needed
- registering as an employer

They do not explain about al of the filing duties you have just got yourself into by setting up a limited company being:

An Annual Return
This is a snap shot of information about the Company at a point in time eg. who are the shareholders, directors etc. This if often confused with the accounts but is very different.

This must be filed at Companies House along with a fee of £15 if electronic or £30 if paper.

Annual Accounts
Although Companies House only require an abbreviated set of accounts to be filed, which look easy to prepare, HMRC do require a full set of accounts including a detailed profit and loss account and directors report.

Companies House and HMRC are very different government departments and do not work together. So do not assume that just because you have filed some with one of them, the other gets it as well.

CT 600 Corporation Tax Return
Along with the full set of accounts, HMRC will require a CT 600 to be completed.

This is not a straight forward form and, unless you have experience, it is best left to professionals to complete.

Annual Self Assessment
Regardless of how much they earn, each director of the Company may have to complete a self assessment which should show all of their income from every source, not just from the company.

Annual Employer Returns
Any business which employs staff has a number of reporting requirements eg. P35, P14, P11D etc.

Quarterly VAT Returns
Any business, not just companies, whose turnover exceeds VAT threshold in the previous 12 months has to register and account for VAT. The biggest mistake made here is assuming that the need to register relates to the accounting year rather than the previous 12 months from the current date.

Late filing
Late filing of any of the above returns will result in a fine, penalties and interest. In the case of your accounts you can be fined by both Companies House and HMRC. The fines start at £100 and increase from there up to the possibility of a criminal conviction for significant late filing of documents.

Dormant Accounts
It doesn't end there of course. Even when you have stopped trading you have to file dormant accounts each year or if you decide to close the company down there is even a long winded process to follow for that.

As you can tell limited company set up is a bit of a hobby horse of mine.

Why – well I see so many examples of where people have used an in line filing service and set up a company for less than £50 and then the fines start piling up for late filing. In most cases a company really does need an accountant for the filing responsibilities but this needs to be balanced with money being very tight in a start up situation.