Low Cost Company Formation

Introduction

If you’re looking to start a new business or have recently formed a limited company, then the incorporation process can be very daunting. There are many factors that must be taken into consideration when choosing the legal structure for your company. We work with clients from all walks of life, from SMEs and start-ups to multinational corporations with complex structures, therefore, we understand that not every client is an expert in this area. Our aim is to make sure you get the most out of our services and ensure your business is set up correctly and legally compliant in accordance with US regulations.

Step 1: Choose a Company Name

• Choose a name that is not too long
• Choose a name that is not too similar to an existing company
• Choose a name that is not too similar to a trademarked name
• Choose a name that is not offensive

Step 2: Appoint Directors

You will be required to appoint a director for your company. The director is the person who runs your company on behalf of the shareholders and therefore must not be an employee of the company. Directors are not required to be shareholders, but all directors must be at least 18 years old, resident in the US, and not have been bankrupt within one year of their appointment as a Director.

As soon as you have appointed your first director they must confirm their acceptance in writing (e-mail will suffice), which will be forwarded to Companies House.

Step 3: Appoint a Company Secretary

The next step is to appoint a company secretary. The company secretary is a person who is responsible for the day to day running of the company and they must be in charge of filing all relevant documents with government bodies such as Companies House.

The following requirements need to be met when appointing your secretary:

• They must be at least 18 years old
• They cannot already be a director.
• If you are going to have more than one director then one of them should be appointed as the company secretary.
• It is important that whoever you choose does not have any conflicts of interest (i.e., do not appoint yourself).

Step 4: Allocate Shares

In this step, you will allocate shares. This means deciding how many shares should be allocated to each director, shareholder, and employee. In addition, if you want an investor to become a shareholder in your company then they need to be allocated shares as well. There are several different types of shareholders:

• Ordinary Shareholders (or Ordinary Members) – These are people who have invested in the company and have voting rights at general meetings.
• Limited Liability Partners – These are not necessarily investors but can also hold ordinary membership status if they contribute financially towards the business.
• Public Limited Companies – They usually offer more capital than small businesses do because they have more money coming in from stock sales/ IPO’s etc.

Step 5: Register for Corporation Tax and VAT

The next step is to register for Corporation Tax and VAT.

1. If you’re a limited company, you have to be registered for corporation tax (CT). This applies whether your business is based in the US or abroad.
2. If your business is based in the UK, you’ll also have to register for VAT if it’s liable for it. There are various ways of registering for VAT:As soon as possible after starting to trade; and

   Within 30 days of becoming liable to pay it on your sales (in other words, when they exceed £85k a year).

Step 6: Open a Bank Account

We recommend that you open a bank account in the name of your company. This will be used to receive and pay money, as well as store documents such as invoices and receipts. You will also need to pay taxes on behalf of the company, so it’s important that this money is kept separate from personal accounts.

The first thing to do when opening an account is ensure that you have all relevant paperwork in order. The bank will ask for proof of identity (such as passport or driver’s license), proof of address (such as utility bill) and any other paperwork relating to the business (like incorporation certificate). Once these have been provided, you can open your business bank account with minimal fuss.

Step 7: Keep Up with Your Tax Affairs

Once you have formed your company, you need to keep an eye on it. This means keeping up with your tax affairs and making sure that you pay what you owe on time.

Conclusion

The process of forming a company can seem complicated, but it shouldn’t be. We are here to help you through all stages of the process, from choosing a name and appointing directors to registering for tax and opening an account. Please contact us if you would like any advice or assistance in establishing your company.