Registering a company (or ‘incorporating’ a company, as it is also called) carries with it many benefits. In fact, ever since Chancellor Gordon Brown reduced the corporation tax to zero back in 2002 for small businesses, many sole traders in the UK have made the decision to register.
Getting your registration set up can be a bit of a hassle in the beginning, as there are a lot of forms to fill out and a lot to get right – but once it’s done, you will quickly begin to see how beneficial this decision can be for small businesses or start-ups. Read on to learn more about how to register a company and many other useful tips…
Registering your company – the advantages
Incorporating your company will tend to increase your net profit. Once you incorporate, you’ll be able to pay yourself a salary in addition to any other profits – which will all be taxed at ‘corporation’ rates. But if you were to do this same thing as a sole trader, you would actually be charged more in taxes.
Of course, one of the most beneficial aspects of incorporation is the fact that your company’s liabilities will be limited to the value of its assets. In other words, you can’t lose more than the money that you’ve invested in your business because the business becomes its own entity.
Incorporating also makes businesses easier to sell.
How do you incorporate a business?
Registering your business can be a bit complicated, depending on how you decide to do it. One of the most popular methods is to go to the Gov.UK website and register there. Of course, while this website does contain some good information and some step-by-step instructions, it doesn’t make the process a ‘no brainer’. For more complicated registration processes, business owners might want to consider having a different person or service help them with the paperwork.
Many people hire an accountant or solicitor before going forward with this crucial step. An accountant can help you on the tax side of things. They can also help you as you weigh your decision and make can help to ensure that everything is being done properly.
Of course, registration isn’t for everyone. One of the downsides to it is that it comes with mounds of paperwork. Unless you can find some way to minimize this, you’re going to have to deal with it.
Incorporating also requires you to disclose all information about your business. You’ll need to disclose information about your profits, your margins, your available cash – even your personal salary. This can open you up to some different risks and might not be worth the advantages to some companies. It really all depends on your current situation.
Should you incorporate?
Incorporating just for the tax incentives isn’t usually the best idea. What you really want to do is consider the long-term goals of the company. Does registration solve long term problems or help you to move in a desired direction? If not, then you might want to take a minute to consider a different option.
But if registration seems to move your company in a good direction and fits with your long-term goals, then it’s probably a good step and one that you’ll have to make eventually – so going for it now will probably be helpful and a good idea.
Finding a service to help
There are actually a number of different services that can help you with the rather complicated process of incorporating your business – and these can save you a ton of time and money.
One of the best is a company called Setupacompany. They’re a service that can have your company registered and official within mere hours of completing a few basic online forms. The process involves 6 basic steps and doesn’t even cost that much.
If I were going to be registering a company, this would definitely be on my list of potential services to check out. With a service like this, you can be sure that you’ll get your paperwork filed in the right places. You can also be sure that you’ll actually receive all of the required documentation that you’ll need to have afterword. Plus, it’s fast. They can actually have you up and going within a day – which is a definite plus.
Getting registered could be a fantastic step for your business – but it all depends on your situation. Don’t rush into it, but also keep in mind that incorporating sooner could potentially make things less difficult in the long run.