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Limited Company

There are different types of limited company, the type that you are most likely to use is a private company limited by shares, described below.

A limited company is an organisation formed to run a business venture. It is a separate legal entity from the persons who own or run it. The company is owned by members. Members can be individuals or other limited companies. Ownership is held through shares in the limited company. A member’s stake in the company is the ratio of the shares owned by that member to the total number of shares issued. Each member’s liability is limited to the original value of the shares received but not paid for.


Directors are appointed to run the company. Directors do not need to own shares in the company.

The company’s finances are separate from the members’ and directors’ personal finances. Any profit after tax made belongs to it. The profit after tax can be shared amongst the owners pro-rata to their stake in the company.


  • Limitation of liability for debts, as long as you have not broken the law, so personal assets are not at risk.
  • Increased credibility with customers and suppliers
  • Protection of trading name
  • More profit retained as personal income


  • Legal responsibility being a director and running a limited company.
  • More onerous filing requirements

Start Up

To incorporate a company you must

  • subscribe for shares in the company.
  • appoint a minimum of one director.
  • register it with Companies House.

Once incorporated you must

  • open a company bank account
  • inform HM Revenue & Customs when the company commences trade
  • register it for VAT if sales in the year are anticipated to be more than the prevailing threshold (refer to Some Information page for current registration level).
  • register it with HMRC as an employer.


Each year the company must

  • File an annual return
  • lodge accounts in an approved statutory format


The company must

  • submit a Corporation Tax return every year
  • submit a VAT return every 3 months and pay the VAT owed, if the firm is VAT registered.
  • submit a Full Payment Submission before every payroll payment.

Each individual director must

  • Submit their own Self Assessment tax return and pay any additional income tax not collected through PAYE

We provide a comprehensive service to deal with all these matters for you.

For more information refer to our Accountancy Services and Tax Compliance pages

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