Setting Up a Limited Company
Establishing a new business can be tedious which is why several accountants in London place a comprehensive Company Formation Package at an affordable cost.
There are several company formation agents in London in and around UK who can assist you. The difference in value added services for most accountants is that they have in-house legal expertise to guide you on necessary issues such as:
- whether the standard articles of association are appropriate for your business or whether you may require change articles.
- shareholder agreements
- possibility of different share classes or dividend policies and Share Capital
- the most effective and efficient tax structure
Whether you are running as a Sole Trader and require to constitute or you are setting up an entirely new company, the best accountants in London can help you out through the process and contact the suitable authorities on your behalf.
The incorporation decision is subject to various factors, not just restricted to profitability, turnover and whether your customers are consumers or businesses. The accountants can assist you in measuring these factors and help you in finalizing for one appropriate for you or your business.
Once you have made up your mind to incorporate, the accountants will help you register with HMRC for payroll, corporation tax and VAT, appointment of directors, allocating shares, understanding dividends and salaries and opening up a business bank account.
If you are not a UK based resident and require a UK business bank account you can also get benefited of the authorized signatory service of most accountants in London. This offers you with a UK based signatory which is a prime requirement at the time of opening a new business bank account.
For Sole Traders : Methods of Changing from Sole trader to Limited Company
As per the tax accountants team, there are two options for sole trader to prefer when wishing to formulate their business- Option A and Option B.
Option A – Incorporation Relief
Incorporation of a sole trader business to a limited company through the means of a default position of any individual is known as Incorporation Relief.
In this option, there is a delay in paying capital gains tax(CGT) by the incorporation relief if you wish to transfer your sole trader business to a limited company in exchange for shares instead of cash.
Incorporation relief widely means that any CGT charge, a part or the whole, of the gains is deferred until the person who transfers the business disposes of the shares. In other words, it happens until you make an exit from the limited company.
Option B –Capital Gains Tax
As opposed to Option A, the sole trader can choose against to apply for incorporation relief to their gain and rather than pay CGT upfront.
The little known advantage to this option is that by choosing to pay CGT instantly, a director’s loan account (DLA) which is worth your sole trader business value that can be drawn down from the limited company fully tax-free.
In this instance, the sole trader business value is calculated subject to its tangible and intangible assets.
Business valuation is a delicate process for any business owner to confront with, yet it is usually the first thing most owners wish to know when selling. You can contact the business consultant of accountant service providers and talk for obtaining the correct valuation of your business.
The way you manage your expenses shows the more flexibility being a limited company. If you eat or travel out while on business, you may be able to claim all or some of this expenditure. You can also purchase tool you require through your business to further enhance its profitability.
It can also make improvements in your business. Offering services through a limited company is usually seen as more professional and providing you higher financial protection if there is something wrong. Unlike a personally liable sole trader in case they are sued, the whole liability rests with the limited company.