Company Formations, Online Company Formation, UK Ltd Company Incorporation

After incorporation, you may decide that you want your newly set up company to become publically listed; that is, you want to list its shares on the stock market. Publically listing a company in the UK involves listing on the London Stock Exchange. When shares are listed the company is seen to have "floated". Here, we look at the markets for publically listing a company, and the factors that you need to consider in order to successfully float.

The process of listing publically can also be known as an Initial Public Offering (IPO). The process is complicated with a number of strict requirements that must be met. Furthermore, the company will face a number of statutory filing obligations and administrative procedures once floated beyond those of a private limited company. The combination of these factors make publically listing a more realistic opportunity for larger companies, that have the capital reserves and trading history to meet all the compulsory requirements.

The London Stock Exchange (LSE) is the most prominent investment exchange in the United Kingdom, and one of the largest in Europe. The stock exchange has three different markets:

• The Main Market: this market contains the only companies which are "officially listed", and is therefore designed for established companies. This market has the highest level of regulation and companies need at least three years of trading history in order to list. On this market, companies can either opt for a "premium" or "standard" listing, each with separate requirements paralleling different EU standards. In order to be listed on the Main Market of the LSE the company must have a minimum capitalisation of £700,000.

• The Alternative Investment Market (AIM): companies that list their securities on this market are often young, smaller companies that are growing and considering whether or not they should float. This market is characterised by fewer regulations and requirements to list, which helps to reduce the cost of listing. The mimimum capital requirement for this market is £50,000 - which is only the case as companies must be a PLC to list (this is the minimum for a PLC). These factors make it an attractive option for young companies. Unlike the Main Market, only shares can be traded on the AIM as opposed to all types of security. Due to the young nature of companies listing in this market, investors tend to be wealthier and those seeking high-risk opportunities.

• The Professional Securities Market (PSM): this market is aimed at those companies that issue specialist securities, for example debt. As with the Main Market the minimum capitalisation is £700,000, however there is no required trading history for the company (as with the AIM). This market attracts professional investors often not based in the UK.

In addition to listing in the UK, it is possible to set up company so that it can be listed on foreign markets as well. In a similar way to the London Stock Exchange, foreign markets will have their own pre-entry conditions and requirements to remain listed. However, if these can be maintained, there are a number of benefits to listing on a number of global markets. This will allow companies to take advantage of the time difference and utilise trading hours in different parts of the world. This essentially means their shares are available to a large pool of potential investors throughout the day.

What is FTSE?

The FTSE is a group created by the Financial Times and the London Stock Exchange together, producing a number of indices. A common index is the FTSE 100, showing the largest 100 companies that are listed on the Main Market. This is recalculated every three months meaning that companies will move into and out of the FTSE 100 depending on the performance of their shares.

If you need any assistance on regulations around shares for your newly set up company, please contact our customer support team. You can contact them on 0844 893 0808 or at formations@wisteria.co.uk.

Starting a business can be an exciting time for any entrepreneur, energised by the prospect of turning their ideas and ambitions into a successful career. When looking to get this idea off the ground, many will look to register a company as the structure to grow your business. However, there are a number of important things you need to consider before company registration, to avoid any delays in the process. The following three action points will help to ensure none of the necessities are missed. Anti Money Laundering - ID documents

When you register a company, it is a legal requirement for the agent that is assisting you to verify your identity, under the Anti Money Laundering Regulations 2007. These documents must be one proof of identity and one proof of residential addres, which should match the information that is supplied on your application. These documents must be taken for any director of the company, and any shareholder with over 20% shareholding. Examples of acceptable documents would include a passport or photocard driving licence, and a utility bill or bank statement.

The speed of forming a company can be increased by being aware of these requirements, and ensuring you have the documents ready to submit.

A Registered Office Address

A second legal requirement in the process of starting a company is to ensure that you have a valid UK address at which to register it. All UK limited companies must have a UK address. Although this could potentially be a residential address, there are certain dangers you need to consider, as this will make your address accessible to the general public. In addition, you need to confirm that any rental or mortgage agreements don't prohibit the use of the address for business purposes.

If you do not want your address to be publically available, you may want to consider using a registered office service. This service can not only assist non-UK directors in meeting the statutory requirements of company formation, but may help any director to protect their privacy and keep their business and home life separate.

A bank account

It is advised that all UK limited companies open a separate business bank account when the company is registered. This is because one of the legal duties of a director is to protect the company's assets. One of the most effective ways of doing this is through keeping company and personal finances completely separate, achieved through a business bank account.

It is often the case that directors will delay the bank account application process after starting their company, but in order to keep efficient accounting records it is advisable to open one immediately. The account application can take a number of days, therefore fast-tracking the application process can be of great assistance.

These are some of the basic factors that should be considered pre-incorporation. In addition to these statutory requirements, it is useful to have the personal details of directors and shareholders to-hand in order to avoid any delays when you register a company. These details include date of birth, addresses, eye colour, mother's maiden name and town of birth.

If you need any assistance with the application process, please don't hesitate to contact our customer support team on 0844 893 0808 or formations@wisteria.co.uk.

One reason that an individual may decide to proceed along the route of company formation is that they want to transfer their sole trader business and assets to the structure of a limited company. Those owning the sole trader will become the director and shareholder of the business and the previous business will be transferred. However, many people ask about the tax consequences of transferring assets to the newly incorporated company.

The main tax issues of transferring assets after company formation arises from the fact that sole traders, partners and limited companies all hold separate legal identities. The transfer of assets is a transfer of capital, and can therefore leave the individuals involved liable to capital gains tax. However, there are a number of relief schemes that can help avoid this liability, discussed below. These are incorporation relief, gift relief and entrepreneurs' relief. Additionally, it is likely that VAT will not be charged on the transfer of assets as the business will be transferred as a "going concern". Alternatively, the newly set up company may transfer the sole trader/partnership busienss' VAT number, and therefore liabilities.

Incorporation relief

Incorporation relief rolls over the capital gain from the transfer into the cost of the shares, thus reducing te base cost of shares for future capital gains purposes. Therefore, the capital gain is realised and the tax liability paid when the owner of the shares (i.e. the sole trader and new shareholder) disposes of them. Normally the transfer of assets will be entirely paid for through shares, as this allows the gain to be rolled over. If some of the transfer is exchanged for cash, this can be charged for capital gains tax immediately. However, it should be noted this may be attractive if gift relief is still available.

Gift relief

This is available when the assets of the sole trader or partnership are transferred for an amount below the market value. The gain on this transfer is held over until a future disposal, when the cost of asset is calculated as market value minus the gain. In this relief, the tax is paid on disposal by the company.

Entrepreneurs' relief

This is another way that those who complete company formation may be able to reduce their liability to Capital Gains Tax. As of April 2011, the UK allowance on this relief was £10 million. The relief applies to the disposal of the whole (or part) of a business, or related business asstes. Claims for Entrepreneurs' Relief must be made on the anniversary of 31st January after the end of the tax year of the asset disposal being claimed against.

There is no legal requirement for written agreements between a company and the new director (or sole trader/partner) when transferring assets, but some form of agreement can be useful. Noting down the date of transfer, amounts paid and the value of assets wil help for tax purposes and relief claims.

If you need any further assistance on the tax consequences of setting up a company, contact us at formations@wisteria.co.uk or on 0844 893 0808.

When looking to register a company, individuals often have a number of different concerns and queries with regards to the process, the timescale, and the requirements. In order to ensure that you can set up company meeting the full statutory requirements, it may be useful to consider these 10 common questions we get asked at Wisteria Formations

1)Why should I set up company?

There are a number of reasons that individuals may decide to set up a limited company: to expand their own business, to start a new business, or to undertake work as a contractor. Limited companies enjoy a number of benefits such as limited liability, allowing you to protect your personal assets. In addition, many enjoy the image benefits of professionalism that an LTD portrays, or the ability to raise finances through share capital.

2) How do you register a company?

The process of starting a company is incredibly simple. We have a 10-step company registration application form on this website which simply asks for all the vital information about your compay, e.g. directors' details, addresses etc. Once we have this information, we're legally required to take two identity documents from all directors, and shareholders with over 20%. These need to be one ID (e.g. passport, photocard driving licence) and one proof of address (e.g. utility bill, or bank statement). All company formation agents are legally required to verify the information provided to them by clients, under the Anti Money Laundering Regulations 2007.

3) How long does the process take?

As well as being easy, the process to start a company is very quick. Our application form can be completed in around 15 minutes. After this, as soon as we recieve the ID documents we can submit to Companies House as soon as possible. We usually receive a respone, and your document, within a number of hours (however, times can be longer than this dependning on how busy Companies House are).

4) Can I register as a non-UK resident?

Yes, you can. Individuals that are from outside of the UK are able to register a company, though they should note that the company does need a UK registered address. We do offer a registered office service for £100+VAT per annum, for those who do not have a UK address. Normal AML checks apply.

5) Can I set up company if I am already employed?

There is nothing in the Companies Act restricting an individual who is already in employment from taking the office of a director or shareholder of a limited company. However, you are advised to check your current terms of employment, to ensure that these do not place any restrictions on you starting a company.

6) Do I need a director and a shareholder?

All limited companies (limited by shares) in the United Kingdom are legally required to register at least one director and at least one shareholder, in order to be incorporated. This can be the same person, i.e. you can be the only member of your limited company - holding both positions. However, you are no longer legally required to appoint a company secretary.

7) How many shares should I allocate?

The answer to this question is that - it is actually your choice. When starting a company our default recommendation however is to allocate 100 shares. This is because 100 shares is quite an easily divisible number, and if you wished to transfer to new shareholders at a later point after incorporation the process could be relatively simple. This makes it easier than issuing new shares. There is no longer a requirement for companies to set an authorised share capital limit.

8 ) Do I need a UK address?

Yes, all UK limited companies are required to have a UK registered address. This can be a registered office address, such as that of an accountant, but it must be a physical address. This is where all correspondence from Companies House and HMRC will be sent, and this is publically available on the company register.

9) Do I need a bank account?

It is advised that all UK limited companies set up a company bank account, as this will help to keep company and personal finances separate. It is a legal duty of the directors of an LTD to protect the assets of the company, and this is the most effective way of doing so.

10) Are there any recurring costs of company registration?

There are no recurring subscription costs to keep your company registered with Companies House, however you are required to file both annual accounts and an annual return. In addition, your company will pay corporation tax on its profits.

These are some of the most common questions about a number of areas surrounding the company formation process. If you have any unanswered questions, please contact us on 0844 893 0808 or at formations@wisteria.co.uk.

One of the commonly neglected, yet one of the most important aspects to setting up a company is the creation of some form of business plan. Having some form of planning in place, whether relating to the goals of your business or the finances, could be the difference between whether your business idea soars or falls flat. There are a number of benefits that a professional plan can offer to your limited company. Here, we look at what is included in many successful business plans, and what assistance they can bring at the start of your company's life.

The financial plan is one of the most favoure options for start-ups who find themselves in unfamiliar territory when setting up a company, simply as it helps to give some idea of the overall costs relating to the business. The financial plan details the profit and loss accounts, balance sheet and cash flow forecasted for a number of years into the future, which can vary depending on the relevance to your business. The financial business plan is often useful in that it can be seen to set a target for the young business. Through knowing and analysing your costs, you can easily create objectives and goals with how much revenue you need to be aiming for.

Furthermore, the financial business plan can be used to calculate potential tax liabilities and cash flow requirements heading into your first few years of trading. As the corporation tax bill does not need to be paid immediately after company formation, this is an area that is often ignored. A number of newly set up companies find themselves trading whilst neglecting this responsibility, then being faced with a large tax bill that they have not considered. Although payments do not need to be made until a later date, you are still taxed on all trading after incorporation. This situation can be avoided by creating a financial business plan that will map your expected tax liability, and allows you to build this expense into your thinking. This will avoid the possibility of not being able to make your payments on time, leaving you liable for a hefty penalty fine with HMRC.

After setting up a company, many directors are looking to obtain some form of funding in order to help their business ideas take-off. A financial business plan is often a pivotal tool in lending money, regardless of the source of capital. Any bank will look to have some indication of the current financial position of your limited company, and the future plans and expectations of the business following incorporation. If you want to gain a loan from the bank, a financial business plan is a must. Similarly, if looking for investment from other sources, such as a venture capitalist, some indication of the viability and finances of the business will still be required. Any smart investor will want to see the financial health of their potential investment, and the chances that they will make money; a financial business plan can provide them with this evidence.

Wisteria have a dedicated business plans team that have years of experience in writing a number of different types of plans for a wide variety of clients and purposes. The Wisteria Business Plans website shows some of the plans we currently offer. Currently, Wisteria Formations are offering you the chance to order a bespoke financial business plan for the discounted price of £375+VAT (original price £450+VAT through Wisteria Business Plans).

If you have any questions, feel free to call us on 0844 893 0808 or contact us at formations@wisteria.co.uk.

Upon company formation there are a number of different officers which can be appointed to the limited company, with differing roles and responsibilities accompanying each position. The two compulsory positions that need to be filled at the time of incorporation are those of a director and a shareholder. At least on director and one shareholder need to be appointed when the company is set up. In addition, a company may choose to appoint a company secretary, but this is no longer a compulsory requirement for UK limited companies.

Simply, the shareholders are the owners of the company as it is their investment which has created the legal entity. However, the shareholders will appoint directors to take responsibility for the daily management and administration. A company may have a number of directors making decisions, which are known as "the board" of the company. Shareholders often limit their involvement in the company's decisions to those with greater importance, such as investment decisions, as opposed to routine ones.

A director is an agent and fiduciary of the company. This means that they have a number of legal duties to use the power installed in them by the company to act in its best interests. If a director breaches one of their duties they may be liable to the company. On the other hand, a shareholder may use their own powers for personal interest, as opposed to solely in the interest of the company. One of the benefits of company formation is that the liability of the owners is limited to their investment in the business. However, it should be noted if the shareholders act as directors, and breach their directors' duties, they may be found personally liable.

The division of responsibility and the relationship between directors and shareholders is often set out in the company's articles of association. Many smaller companies will follow the default "Model Articles" when starting a company. The powers of the board are often wide-ranging, allowing them to make a number of routine decisions ensuring that the company can be run in an efficient manner without the interference of the shareholders.

The shareholders have often delegated these management and administrative powers to the board, meaning that they no longer retain the powers. The shareholders of a company do, however, hold ultimate control over the board. This means that if the board or certain directors are not exercising their powers in a way the board deem appropriate, they can remove them. There are powers that shareholders retain, for example altering share capital or the composition of the board. Some of these rights might be delegated to the board (e.g. appointing directors), while others cannot (e.g. editing the Articles of Association). Furthermore, the shareholders may pass a special resolution to give instructions to the board to behave in a certain way.

It is important to be aware of the relationships, responsibilities and rights of the members and officers following your company formation, in order to avoid conflict. Improper use of rights and powers can lead to dispute, potentially legal and contractual, that can harm the operation of your business. Ensuring familiarity of the difference between a director and a shareholder from the offset is vital.

If you have any questions about your rights or obligations in your position following your company formation, please contact our customer support team. They can be reached at formations@wisteria.co.uk, or on 0844 893 0808.

You may be looking to set up company as part of a group of companies, meaning that it either has a parent or subsidiary relationship with another entity. The two terms often used in company names that link to the group structure are "group" or "holdings", which are sensitive words. When given the restrictions on the use of this word, many individuals will change their company name. However, some are actually looking to create a group, and it is important that they are aware of the obligations that apply to their companies in completing statutory administration.

As with all entities following company registration, companies that comprise a group are still legally required to submit their annual accounts to Companies House. However, it is possible for a group to produce consolidated accounts, which contain the financial statements and position of all the companies involved. The parent (or holding) company of the group is responsible for producing the accounts for all subsidiary companies, as well as their own accounts. The accounts must still include a director's report, and are subject to the same audit, circulation and filing procedure as individual company accounts.

There are, however, certain situations in which a company does not have to produce group company accounts:

• Small companies are not obliged to prepare group company accounts.


• The parent company is a subsidiary of another group, and is included in that set of group accounts for the financial year.


• Subsidiaries are exempt from consolidation - if their inclusion isn't significant for the accurate view of the group's financial positions; the rights of the parent over the subsidiary are restricted; the information is too time-consuming/expensive to obtain; or the parent is only looking to sell the subsidiary.

It is important to note that if a company is exempt from group accounts, the parent must include certain details in the notes of their individual accounts. This includes an explanation into the exemption, the name of subsidiaries, details of their shareholders etc.

Similarly to individual accounts, consolidated group accounts will contain a balance sheet and a profit and loss account. These should include the financial information about all the companies within the group. Financial statements from each of the individual entities of the group should be taken from the same financial year. The consolidated accounts will take a similar format to those of the individual undertakings, as this is guided by regulation in the Companies Act.

There are, however, a number of adjustments from the individual statements in order to prepare consolidated accounts. It is important that assets and liabilities are valued on the same basis, whilst group transactions must also be eliminated from individual accounts. Differing accounting rules between the individual entities must be disclosed in the group accounts notes.

If you need any further assistance with the company registration of a group, please feel free to contact our customer support team on 0844 893 0808. Alternatively, they can be reached by email at formations@wisteria.co.uk.

There are a number of important time periods and dates to consider following your company formation that will direct when statutory filings for your company need to be completed. There are a number of different submissions that need to be made to Companies House, namely the annual return and annual accounts. These must related to the company's information and finances over a certain period of time, often the company's financial year.

The "financial year" is the amount of time that a company's annual accounts need to be prepared for, i.e. it is the length of the company's accounting reference period. The accounts must illustrate the financial health and performance of the company in the previous year. The year begins on the date of company formation; recurring years will begin the day after the end of the previous financial year. For example, if your incorporate a company on 12th January 2012, the first financial year will run until 11th January 2013. The last date of the accounting reference period is known as the accounting reference date (ARD). Limited company directors may decide to make accounts up to a date that is 7 days before or after the ARD.

A company's ARD is automatically set at the time of company formation. This becomes the last day of the month of incorporation. So, if setting up a company on 12th January 2012, the accounting reference date will be set as 31st January.

Is it possible to change my accounting reference date?

Some companies will look to change their ARD, and therefore accounting reference period, for a number of possible reasons. It is possible for a company to alter the period, though there are certain considerations. If looking to change the date, this request must be submitted to Companies House prior to the deadline for the accounts to be filed. The period can be shortened or extended, though not beyond 18 months. The only circumstance in which periods can be longer than this is if the company is in administration.

Additionally, there are restrictions on the frequency with which a company can change their accounting reference date and period. The financial year cannot be changed more than once in a five year period, with the exception that:

• The company is in administration.


• The company is either the parent or subsidiary of another entity within the European Economic Area, so that the dates of the two companies conincide.


• It is an overseas company, and the Secretary of State has approved the change.

Changing a company's accounting reference date can be completed directly with Companies House, either through the paper or software filing of the correct form.

If you need any further assistance with determining your company's financial year and the obligations attached to this, please contact us on 0844 893 0808 or at formations@wisteria.co.uk

Running a payroll system is an important part of running any limited company that has employees, ensuring that they are paid the correct amount at the correct time. Your company's payroll system will form an important part of regular management and administration, as part of your Pay As You Earn (PAYE) scheme. There are a number of different methods used to successfully run the system, and it is important to choose one which matches not only your company's needs but also your personal experience and expertise.

The PAYE system is the method through which HMRC collect both Income Tax and National Insurance Contributions (NICs) from the pay of employees in the UK. It is a legal requirement to register as an employer (for PAYE) upon company registration if you are going to be paying a salary to any employees of the company. Even in the event that you are the single member of your newly set up company, if you plan to pay yourself a salary above the PAYE thresholds you are required to register. Payroll refers to the record-keeping system that is used to calculate your employees' pay and relevant deductions under the PAYE scheme. The payroll system will cover not only wages and salaries, but also any bonuses, holiday pay and commission that may be paid; all forms of remuneration.

When thinking about running a payroll after company registration, most are faced with a few options.

Outsourcing

This is where an external agent such as an accountant will run the payroll system for you, ensuring that all relevant pay calculations are accurate. When outsourcing your payroll there is often a degree of flexibility with how much involvement you want to have in the process, though you will usually be responsible responsible for paying the correct tax and NIC payments. It is important to consider how changeable the accountant's fees and systems are, to ensure that they can accommodate you in the event that your bring on a new employee. However, if you are aware of the fees and the terms, this method can be beneficial in allowing you to concentrate on other areas of your business.

In-House

The main alternative to outsourcing the running of your payroll after company registration is to make the calculations yourself. Most will use some form of electronic system in order to do this, whether this be commercial software or that provided by HMRC. Once listing the employees' details from the P45 or P46 forms, the software will complete all necessary computations for you.

Alternatively, you could run a payroll system manually. HMRC produce some guides and handbooks with relation to this.

Running a payroll is important in completing statutory forms, such as the P45 and P46, as well as the Employer Annual Return. An accurate payroll system with up-to-date records helps to ensure that your company is paying employees the right amount of money at the correct time. It is also useful in meeting the statutory requirement of ensuring the correct deductions are made from this pay.

If you need any further assistance with PAYE or payroll following your company registration, please contact us on 0844 893 0808 or at formations@wisteria.co.uk.

One of the important considerations when setting up a company is whether you need to be registered for VAT. Sometimes the decision can be forced as the company reaches the compulsory registration threshold, or alternatively a company may voluntarily register. Either way, there is a chance that the decision will not be immediate; the company may trade or make some transactions before VAT registration is completed.

As of August 2011, a company is legally required to register for VAT when their taxable turnover from the last 12 months exceeds a level of £73,000. The VAT registration limits are changed on an annual basis, so it is important to be wary of these when setting up a company. However, there are certain benefits that may encourage a company to register for VAT prior to this level of turnover. For example, the ability to claim relief on start-up costs; reclaiming costs from suppliers that charge VAT; and overall image benefits of registration.

However, prior to registration it is possible that the company will execute a number of transactions that may be eligible for some of these benefits, i.e. reclaiming the VAT costs. HMRC's general rule is that goods which were purchased up to four years before VAT registration (and services up to six months before) can be eligible for reclaiming the VAT. However, there are certain conditions that need to be met in order for the transaction to qualify. The requirements for goods and services are outlined below.

Reclaiming VAT on goods purchased

For goods which were purchased four years before VAT registration takes place, costs can be reclaimed if:

• They were originally purchased by the body that is now VAT registered (whether this is an individual or a company).


• The goods are purchased for business purposes, that is, they relate to the good or service that your produce. The products must be VAT taxable. This means that goods which are used to produce VAT-exempt products cannot be reclaimed.


• The goods are either still in your possession, or have been used to make goods that are still in your possession. This means the goods haven't been used up (for example fuel), or sold prior to VAT registration.

When individuals are setting up a company from home, there is often confusion over whether they can reclaim on goods such as a computer. Although the computer may be used for home and personal matters as well as business, it is still possible to claim some VAT. In these circumstances, you must apportion the amount of time the goods are used for business purposes, and reclaim the tax accordingly.

In order to claim VAT on these goods you must record these dates and amounts obtained as a basic evidence or validation for your claim. This can be claimed in your first VAT return. You will need to provide VAT invoices.

Reclaiming VAT on services purchased

The time limit for services purchased prior to VAT registration is six months. You must meet the following criteria in order to be eligible to reclaim:

• The services were bought by the same entity that is now VAT registered.


• The services are for your business purposes (which are VAT taxable).

The same restrictions apply to services as to goods - i.e. they can't relate to goods that have been sold prior to registration or VAT exempt goods/services that your business supplies. In addition, the same rules of apportionment for business purposes apply to services. An example of this may be for internet provider services.

If your company is likely to exceed the VAT threshold soon it is advisable to register for VAT at company formation. If you have any questions about VAT registration, please contact our customer support team at formations@wisteria.co.uk or on 0844 893 0808.