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Running a limited company in United Kingdom

Updated time: 04 Jan, 2019, 09:53 (UTC+08:00)

For any Limited company in UK, you have to comply with the following requirements.

Directors' responsibilities

As a director of a limited company, you must:

  • follow the company’s rules, shown in its articles of association
  • keep company records and report changes on company structure, ownership or company address.
  • file your accounts and your Company Tax Return.
  • inform other shareholders if you might personally benefit from a transaction the company makes
  • pay Corporation Tax

You can hire other people to manage some of these things day-to-day (for example, an accountant) but you’re still legally responsible for your company’s records, accounts and performance. Offshore Company Corp can support you with all of these requirements.

Running a limited company in United Kingdom

Taking money out of a limited company

How you take money out of the company depends on purposes and volume that you take out.

Salary, expenses and benefits

If you want the company to pay you or anyone else a salary, expenses or benefits, you must register the company as an employer.
The company must take Income Tax and National Insurance contributions from your salary payments and pay these to HM Revenue and Customs (HMRC), along with employers’ National Insurance contributions.
If you or one of your employees make personal use of something that belongs to the business, you must report it as a benefit and pay any tax due.

Dividends

A dividend is a payment a company can make to its shareholders if it has made a profit.
You cannot count dividends as business costs when you work out your Corporation Tax.
You must usually pay dividends to all shareholders.
To pay a dividend, you must:

  • hold a directors’ meeting to ‘declare’ the dividend
  • keep minutes of the meeting, even if you’re the only director

Dividend paperwork

For each dividend payment the company makes, you must write up a dividend voucher showing the:

  • date
  • company name
  • names of the shareholders being paid a dividend
  • amount of the dividend

You must give a copy of the voucher to recipients of the dividend and keep a copy for your company’s records.

Tax on dividends

Your company does not need to pay tax on dividend payments. But shareholders may have to pay Income Tax if they’re over £2,000.

Directors’ loans

If you take more money out of a company than you’ve put in - and it’s not salary or dividend - it’s called a ‘directors’ loan’.
If your company makes directors’ loans, you must keep records of them.

Changes that shareholders must approve

You may need to get shareholders to vote on the decision if you want to:

  • change the company name
  • remove a director
  • change the company’s articles of association

This is called ‘passing a resolution’. Most resolutions will need a majority to agree (called an ‘ordinary resolution’). Some might require a 75% majority (called a ‘special resolution’).

Company and accounting records

You must keep:

  • records about the company itself
  • financial and accounting records

You can hire a professional (for example, an accountant, tax filling), Offshore Company Corp can help you on this all.
HM Revenue and Customs (HMRC) may check your records to make sure you’re paying the right amount of tax.

Records about the company

You must keep details of:

  • directors, shareholders and company secretaries
  • the results of any shareholder votes and resolutions
  • promises for the company to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to
  • promises the company makes for payments if something goes wrong and it’s the company’s fault (‘indemnities’)
  • transactions when someone buys shares in the company
  • loans or mortgages secured against the company’s assets

Register of ‘people with significant control’

You must also keep a register of ‘people with significant control’ (PSC). Your PSC register must include details of anyone who:

  • has more than 25% shares or voting rights in your company
  • can appoint or remove a majority of directors
  • can influence or control your company or trust

You still need to keep a record if there are no people with significant control.
Read more guidance on keeping a PSC register if your company’s ownership and control is not simple.

Accounting records

You must keep accounting records that include:

  • all money received and spent by the company
  • details of assets owned by the company
  • debts the company owes or is owed
  • stock the company owns at the end of the financial year
  • the stocktakings you used to work out the stock figure
  • all goods bought and sold
  • who you bought and sold them to and from (unless you run a retail business)

You must also keep any other financial records, information and calculations you need to prepare and file your annual accounts and Company Tax Return. This includes records of:

  • all money spent by the company, for example receipts, petty cash books, orders and delivery notes
  • all money received by the company, for example invoices, contracts, sales books and till rolls
  • any other relevant documents, for example bank statements and correspondence

Confirmation statement (annual return)

You need to check that the information Companies House has about your company is correct every year. This is called a confirmation statement (previously an annual return).

Check your company’s details

You need to check the following:

  • the details of your registered office, directors, secretary and the address where you keep your records
  • your statement of capital and shareholder information if your company has shares
  • your SIC code (the number that identifies what your company does)
  • your register of ‘people with significant control’ (PSC)

Send your confirmation statement

Government fee from GBP 40.

If you need to report changes

You can report changes to your statement of capital, shareholder information and SIC codes at the same time.
You cannot use the confirmation statement to report changes to:

  • your company’s officers
  • the registered office address
  • the address where you keep your records
  • people with significant control

You must file those changes separately with Companies House.

When it’s due

You’ll get an email alert or a reminder letter to your company’s registered office when your confirmation statement is due.
The due date is usually a year after either:

  • the date your company incorporated
  • the date you filed your last annual return or confirmation statement

You can file your confirmation statement up to 14 days after the due date.

Signs, stationery and promotional material

Signs

You must display a sign showing your company name at your registered company address and wherever your business operates. If you’re running your business from home, you do not need to display a sign there.
The sign must be easy to read and to see at any time, not just when you’re open.

Stationery and promotional material

You must include your company’s name on all company documents, publicity and letters.
On business letters, order forms and websites, you must show:

  • the company’s registered number
  • its registered office address
  • where the company is registered (England and Wales, Scotland or Northern Ireland)
  • the fact that it’s a limited company (usually by spelling out the company’s full name including ‘Limited’ or ‘Ltd’)

If you want to include directors’ names, you must list all of them.
If you want to show your company’s share capital (how much the shares were worth when you issued them), you must say how much is ‘paid up’ (owned by shareholders).

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