Guide to Setting Up & Running a Limited Company
1. Understanding the Structure
A limited company is a separate legal entity from the people who run it. This creates legal distance between you and your business — offering greater protection, but also more responsibilities.
- 📌 The Company: A legal person in the eyes of the law. It owns its income, pays its taxes, and files its own accounts.
- 👨💼 The Director: Legally responsible for running the company and ensuring all filings are submitted correctly and on time.
- 📈 The Shareholder: The owner(s) of the company. They are entitled to profits via dividends. You can be both the director and the sole shareholder.
2. Key Filings & Legal Obligations
Operating a limited company requires several filings with both HMRC and Companies House. These filings are mandatory and attract penalties if submitted late.
- 🧾 Annual Accounts: Prepared each year and filed with Companies House. They must follow specific accounting standards.
- 📄 Corporation Tax Return (CT600): Sent to HMRC along with full accounts. Due 12 months after your accounting period ends (but tax must be paid within 9 months and 1 day).
- 📋 Confirmation Statement: A yearly snapshot of your company structure and ownership, filed with Companies House to confirm everything is up to date.
- 📚 Record-Keeping: You must keep detailed financial records and documentation for at least 6 years.
3. Director's Personal Responsibilities
- 🧍♂️ Self-Assessment (SA100): As a director, you must file a personal tax return annually. This includes your salary, dividends, and any other income.
- 💰 Dividends: Profits can be paid to shareholders (including yourself) as dividends. These must be properly declared and taxed at your personal rate.
4. Additional Considerations
- 🏦 Business Bank Account: Required. A limited company must use a separate business account for all transactions.
- 📑 PAYE Registration: If you’re taking a salary or hiring employees, you’ll need to register for PAYE and manage payroll obligations.
- 📊 VAT Registration: Mandatory if turnover exceeds £90,000. Voluntary registration is also possible if beneficial.
5. We’re Here to Help
At B Librium Accounting, we provide:
- 📁 Full company formation and registered office setup
- 🧾 Year-end accounts and Corporation Tax (CT600) filing
- 📤 Confirmation Statement and Companies House submissions
- 💼 Personal Self-Assessment for directors
- 📉 Advice on salary vs dividend structure for optimal tax efficiency
Speak to our team today for practical, jargon-free support tailored to your company’s needs.