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When you form a new company you need to decide which way your initally going to set it up as either a sole trader or partnership or a a limited company.

As a Sole trader

As a sole trader or partnership is a simple way to get going and can change to a limited company as your situation changes. You just need to inform the correct goverment departments that your now self-employed and you can then start immediately unless you have to be licensed for what you do.

As a sole trader you are liable in the unlikely event something happens, you have overall power with the company and so would have fewer worrys and concerns to do with the red tape that goes on. so no need to register with companies house or deal with any accounting requirements needed for a limited company, this would not mean that your except from doing any accounting.

For limited company formations you have a little more work to do but this is not without its own reward. This is should anything go wrong then the company finances are separate to the personal finances, and so this mean that any company debt are not the direct responsibility of the shareholders but may be needed to guarantee loans and credit.

In the UK, for UK company formations in order to register a limited liability company you must complete these:

Register the company with companies house.

The annual accounts must be filled with companies house.

The annual return to companies house be filled which updates certain details about the company.

You must inform HMRC of any profit or taxable income within a companies year.

You must complete and return the corporation tax form and pay any tax due with 9 months of the company year end every year.

Anyone who is employed by the company must be paying the correct amount of national insurance and income tax on their earnings.

Some people choose to use an intermediary to fill in the documents that are need for submission to companies’ house when they form a company. The documents that are used are detailed below, and should seek the relevant help if necessary.

1. Memorandum of Association Sets out the core company information like name, location and the nature of the business.

2. Articles of Association Which contains details of each Directors power, shareholders rights etc.

3. Form IN01 This contains the details of the companies registered offices along with the company secretary if applicable and each director. It also has the subscribers and if limited by shares the details of the share capital.

These forms can be prepared by a company specialising in setting up of companies or your accountants can, there is nothing in law that states you must use an agency but is best if you have never done it.