LIMITED COMPANIES FAQ

LIMITED COMPANIES FAQ

1. What is a limited company?
It is one of the most popular forms of business ownership, which has a legal personality separate from that of its owners. The shareholders of the company are not personally responsible for its liability, which means they do not risk their personal assets.
2. What do I need to set up a limited company?
The name of the company
– The address of the company
– The details and address of the director
– The number of the shareholders of the company and their details
3. Who can be the director?
The director can be a person who:
– has not been disqualified from holding the director’s position
– is over 16 years old
– has no uncleared debts
4. What are the advantages of trading as a limited company?
The most attractive benefit is the aspect of limited liability. That protects personal assets of shareholders should the company encounter financial difficulties.
Limited companies also instil trust and confidence among suppliers and customers.
The ownership of a limited company can easily be established through the division of shares. The shares can be used to generate capital.
5. Who can set up a limited company?
Any individual of any nationality may register a limited company, given the following conditions are met:
– an individual is not an undischarged bankrupt
– an individual has not been restrained by court order
– an individual is not subject to UK government restrictions
6. What kind of accounts and records must a limited company maintain?
All companies are required to keep a full record of income, expenditure, liabilities, and assets. They will help your accountant when submitting company’s annual accounts.
7. Do I need a company secretary?
No, it is no longer a requirement. Since April 6, 2008, it is the decision of the limited company director whether or not to have a company secretary.
8. How do I choose a name for my company?
You cannot choose a name that is already registered. The name must not be considered offensive, or be associated with the government or local authority.
9. What if the company doesn’t succeed or I no longer need it?
If your company has not traded for at least three months you can apply to Companies House and HMRC to remove the company from their register. To do so you need to fill in a 652a form.
10. Am I liable for the company’s debts?
No, a limited company is “limited” in the sense that the owners are not liable for any company’s debts. You are only liable if you signed a personal guarantee or if you trade fraudulently.