Business owners choose to create a limited company for two key reasons: limited liability and/or perceived credibility. But what is involved with running a limited company?
This may be the first time that you’ve had to complete a Corporation Tax return – or needed to issue dividends to shareholders. The Spicer & Co team enjoys talking about accountancy issues in plain English. If you have started a limited company – or are thinking about it – we hope that the information below will be helpful…
What roles are needed within a limited company?
Two distinct roles are involved with limited companies:
- Directors – are appointed by members (shareholders) to run the business day to day. You need to have at least one company director. This can be a person, or a corporate body. If shareholders would like more directors involved, there is no limit to the number of directors you can have! (Directors do not have to be resident in the UK – they can live anywhere.)
In its simplest form, a limited company can be operated by just one person. This individual would be the sole director and shareholder of the business. Many ‘one man band’ limited companies exist where the sole director is also the sole shareholder. For example – several consultants who use our accountancy services operate in this way.
A director must be:
- At least 16 years old
- Not be a discharged bankrupt
- Not on the Disqualified Directors Register
- Not the company auditor
- Secretaries – it is optional for private limited companies to have a Company Secretary; this role mandatory for public limited companies. Again, the Company Secretary role can be allocated to a person or a corporate body.
A company can change directors/secretary at any time by informing Companies House of the changes.
What do these limited company roles entail?
It is the Director(s)’ job to run the company in accordance with Companies Act and the Articles of Association of the company. (The Articles of Association is a document that contains the purpose of the company as well as the duties and responsibilities of its members. It is filed at Companies House.)
Directors are responsible for making sure all filing deadlines are met for business tax, payroll, and accounts. Also, they must ensure that the accounting records and documents are complete and accurate.
These are personal obligations and Directors can be held accountable if responsibilities not met. You can employ an accountant to carry out these tasks, but the ultimate responsibility lies with the Director(s).
The Company Secretary can assist the Director(s) and help reduce workload involved.
Corporation Tax Returns and more…
There are several documents that all limited companies, regardless of size, must submit annually:
- Corporate Tax Return – so that corporation tax can be calculated
- Confirmation Statement – confirming the company information held at Companies House
Accountancy support for limited companies
Many directors choose to use accountants to support their limited companies. Whilst you are not obliged to do so, some people prefer the peace of mind that their accountants will assist them with:
- Correct collation and presentation of financial information
- Compilation of year-end accounts
- Completion and submission of Corporate Tax returns
- Calculation of Corporate Tax and dividend payments due
- Submission of information to Companies House, how and where needed
- Dealing with company-related correspondence (Companies House, hmrc)
For more information…
For a tailored, no obligation discussion about your own situation and plans, pop in for a chat with the team at Spicer & Co. Let’s talk.