Setting up a limited company can be a big step forward for your business. Perhaps you’re starting out as a limited company from the beginning or your changing structure after spending time as a sole trader or partnership. Whatever the case, becoming a limited company can offer some definite advantages over being self-employed. However, many people are uncertain about the costs involved and whether these might be enough to be off-putting.
The core cost behind becoming a limited company is the registration fee. This is not particularly large, but does vary quite a bit depending on which of the three possible registration methods you take:
- Online Application: Applications made online are the cheapest option, as well as one of the quickest. The cost is only £15, and your new company will usually be registered within 24 hours of submitting your application.
- Postal Application: This process are slower than the online one, and also more expensive. However, some businesses find that submitting the application by post suits them better for one reason or another. The cost is £40, and the registration process generally takes 8-10 days to complete.
- Same-Day Application: This is an express service for those who want their registration processed absolutely as quickly as possible. For the same-day service to go through, your application must reach Companies House by 3pm on the day you want to be registered, and be contained in an envelope with the words “same day service” marked in the top left-hand corner. The cost for this service is £100. Naturally there will also be postage or, more likely, express courier fees involved with getting your application in on time.
The cost isn’t the only thing to consider when registering a new limited company. There is also the application process itself. Your application must be fully and accurately filled in. If you have any doubts about completing the application properly and in full, or if all the hard work of getting your new business off the ground doesn’t leave you with much spare time, you might want to seek professional help with registering your company. A good accountant will be able to fully and accurately complete your registration for you, requiring only the minimum of effort on your part. This is a service we can offer conveniently and inexpensively. Get in touch with us to find out more.
Why Become a Limited Company at All?
Even the most expensive registration process is far from bank-breaking, but why might you want to become a limited company at all? This depends on your circumstances, and some businesses might be better off as sole traders. For others, though, a limited company offers very definite advantages.
The biggest advantage of a limited company over self-employment is that you are not personally liable for your business’ debts. This is a very useful safety net if you need to borrow money, or if you work in an industry that could face hefty fines or fees in the event of legal disputes or compliance issues.
For some businesses, a limited company may also be more tax-efficient. We will be able to help you work out whether this applies to you. Contact us for more information.