What to Do After You’ve Registered Your Limited Company

Setting up a business is great, but it is only the beginning of the incorporation of your Limited Company. Once your business has been incorporated, there are several critical steps you should take to ensure you comply with the legal requirements while setting yourself up for success. 

This in-depth guide will take you through what comes next, giving detailed insight and actionable tips which will drive your business to success.

1. Opening of Business Bank Account

You are going to need a business bank account through which your company will operate its finances. It separates personal and business deals for clarity in bookkeeping and for transparency in view.

Why Necessary:

• Legal Compliance - HMRC demands that clear records be kept for tax purposes. When the two sets of transactions remain separate, it becomes much easier to prepare accurate financial statements and tax returns. Such segregation, in turn, makes it easier to carry out audits and avoid potential legal complications because of mingled accounts.
• Professional Image - A business account adds to the credibility of your company. Clients and suppliers will trust a business with a bank account that is professional in nature rather than using one's personal account. For example, receiving a payment to "XYZ Consulting Ltd." looks more legitimate than sending payments to a personal account.
• Financial Organisation - Expenses and income are easier to track. This helps especially when trying to get loans or grants, since financial records must be available. Banks also favour businesses with accounts already set up for business-specific financial products such as credit lines or loans.

Difficulties When Opening a Business Bank Account:

• Documentation Issues - The most common problem usually revolves around the provision of appropriate documents. For instance, your proof of identity or address may be denied if these are outdated or not clear. Whichever documents are presented should be current and reflect accurately on your company registration.
• Right Bank - In fact, choosing the best between a traditional bank such as Barclays or HSBC and a digital bank such as Starling or Monzo is relatively very challenging. In traditional banks, you often get in-branch support, among other extra services, while with digital banks, you have speed and fewer fees. Consider your needs carefully; for instance, if you need to deposit cash on a frequent basis, you may want to consider a traditional bank.

How to Open a Business Bank Account

Research providers, comparing through charges, services and facilities. Some may offer one year's free banking while others provide direct links to popular accounting software.

The typical documents required to open a bank account in the UK include:

• Certificate of Incorporation - Proof that your company is registered.
• Proof of Identity - This may be your passport, driver's license, or national ID card.
• Proof of Address - Utility bills or council tax bills bearing dates not earlier than three months.
• Company Registration Number - This is provided by Companies House upon registration.

Overcoming Challenges:

• If your documents are rejected, contact the bank’s support team to clarify what is needed and reapply promptly.
• For new companies, digital banks are often more accommodating, as they are geared towards startups and freelancers. Explore reviews and testimonials to gauge user experiences.
• When approval delays occur, follow up regularly with the bank and provide any additional information promptly.

2. Register for Corporation Tax

Once your Limited Company is incorporated, you are required to register for Corporation Tax with HMRC within three months of starting business activities (e.g., trading, hiring employees or earning income).

Steps to Register:

• Access HMRC Online - With the help of the Government Gateway ID created during the registration process, this site will now allow one to address the company's tax issues.
• Provide Company Particulars - Provide your registration number, date of commencement of business, and accounting reference date. Ensure that these are accurate to prevent delays in processing.
• Receive Your UTR - HMRC will issue a Unique Taxpayer Reference, which you will need for filing taxes. Keep this number safe, as it is essential for all tax-related correspondence.

Penalties for Non-Compliance:

Failure to do so will attract fines, so it is best practice to do this as soon as possible. Even when your company is not trading, you may still have to make a nil return to avoid any penalty. For example, when you are awaiting commencement and have registered, HMRC will still expect a record of your financial standing.

3. Register for VAT (If Applicable)

Your company needs to be registered for VAT, if the total taxable turnover for the past 12 months exceeds £90,000 or you anticipate the company’s taxable turnover exceed £90,000 in the next 30 days. However, even if your turnover is below this threshold, voluntary registration can offer strategic advantages depending on your industry and business model.

Benefits of Voluntary VAT Registration:

• Claim Back VAT on Business Expenses - This will be especially useful if one is in such a business that requires huge upfront investments. Imagine a photography business that may have to buy cameras and other equipment whose prices include VAT. They can claim back the VAT on such items, thus reducing their overall costs if they can register voluntarily.

• Authority - Many clients and suppliers recognise a VAT-registered organisation as more reliable and responsible. Just imagine a consultancy among corporate clients; being a VAT-registered company may raise trust in negotiations.

  

This will make it easier to trade with other businesses that are VAT-registered since the VAT charged on goods and services can be claimed back. Ease of transaction will lead to smoother partnerships, and smoother relations with suppliers.

Challenges:

Although there are quite a number of advantages of voluntary registration, several challenges are also involved:

• Increased Administrative Burden - Continuous filing of VAT returns may be a headache, especially for small-scale businesses that may not have professional accounting personnel. For example, an e-commerce sole trader may experience strain in keeping a detailed record of the VAT on every transaction.
• Cash Flow Management - Charging VAT adds to the cost of the product or service for the clients who are not VAT-registered. For instance, a freelance writer who is dealing with small businesses might lose those clients since they are unable to claim VAT back, their net cost would increase.

4. Understand Your Responsibilities

As a director of a Limited Company, you are confronted with certain legal and financial responsibilities, failure to discharge which may attract some serious consequences. These would include the keeping of proper books and records and also statutory compliance and protection of the interests of the company. We outline some of the important ones here along with the consequences of failure in complying.

a. Filing Annual Accounts

You are obligated to file annual accounts with Companies House, which represents the financial activities of your company. This includes a balance sheet showing the assets and liabilities and a profit-and-loss account, which summarises your income and expenses. Accurate filings not only avoid legal issues but also reflect the financial health of your business to stakeholders and investors. Late submission may attract fines and penalties, going up based on the longer the lateness persists, among other increased penalties for persistent failure to do so.

b. Filing Confirmation Statement

Every 12 months, you are required to file a confirmation statement to ensure Companies House has accurate information about your company. This includes details like the registered office address, director names, and shareholder information. Non-compliance can lead to your company being struck off the register, effectively dissolving your business.

c. Maintaining Statutory Records

These include:

• Register of Members (Shareholders) - Lists all shareholders and their shareholdings.
• Register of Directors - This outlines who your company's directors are.
• Records of Resolutions and Decisions - Records the major decisions of either the board or the shareholders regarding structural changes in the company or its capital.

Failure to keep these records may result in fines and expose the company to possible disputes and inquiries.

d. Compliance with the Companies Act

The different directors are to follow the various duties given in the Companies Act regarding the success of the company, reasonable care and skills, and also not to involve themselves in a situation which can be considered as conflict of interest.

e. Safeguarding Employee and Stakeholder Interests

Directors owe a duty to their company that it should observe the laws relating to employment, health and safety, and stakeholder agreements. Failure to pay employees' wages may lead to a claim through the employment tribunals, and failure to maintain standards of safety may result in fines through a regulatory body such as the Health and Safety Executive (HSE).

5. Set Up Payroll (If Hiring Employees)

If your business employs staff, you must set up a PAYE (Pay As You Earn) system to handle payroll taxes.

Steps to Set Up PAYE:

• Register as an Employer - Do this via HMRC’s website to receive your employer reference number.
• Choose Payroll Software - Options like Xero, QuickBooks, or Gusto can streamline payroll management, calculate deductions automatically, and generate payslips.
• Understand Employer Responsibilities - You are responsible for deducting income tax and National Insurance from employee salaries, paying employer contributions, and reporting this information to HMRC.

6. Insure Your Business

Business insurance is important to your Limited Company for protection against certain financial risks that might arise. Common insurance covers include:

• Public Liability Insurance - This covers third-party claims for injury or damage caused by your business operations. For example, if someone slips in your store, this could cover the legal and compensation costs.
• Professional Indemnity Insurance - Very relevant to service-based businesses, who need to be insured against claims of negligence or poor work. An IT consultant might need this if a system they designed fails and causes losses to a client.
• Employer’s Liability Insurance - Legally required if you have employees. It protects your company if an employee is injured or falls ill due to their work.

7. Establish an Online Presence

An online presence is simply a no-brainer in this decade. The following will get you started:

a. Get a Domain Name

Get a domain that reflects your business name. You can go ahead and check if your desired domain is available for registration on GoDaddy or Namecheap.

b. Build a Website

Even the simplest website with your service listings, contact details, and a short company description will build some level of credibility. Make a basic website on free/cheap resources like WordPress or Wix, requiring minimum technical ability.

c. Leverage Social Media to Your Advantage

Create profiles on LinkedIn, Facebook, or Instagram-depending on where your target audience hangs out. With regular and consistent posting and engaging, one can build visibility of the brand, thereby acquiring customers.

8. Set Up Accounting and Bookkeeping Systems

Accurate financial records are crucial for compliance and decision-making. Consider the following:

• Hire an Accountant - A professional can manage tax filings, provide financial advice, and ensure you are taking advantage of all available deductions.
• Utilise Accounting Software - Invoicing your clients, tracking expenses, and generating financial reports become much easier with accounting software such as FigsFlow, and other similar tools. Many of these will be automatically updated through the service provider's integration from the business bank account.

9. Create a Business Plan

Although you have registered your Limited Company, a detailed business plan is essential for growth. Include:

• Executive Summary - Outline your business goals and mission statement.
• Market Analysis - Research your industry, competitors, and target audience to identify opportunities.
• Financial Projections - Provide detailed income, expense, and profit forecasts for the next three to five years.

• Marketing Strategies - Define how you will attract and retain customers, including advertising channels and promotional activities.

  

A clear plan not only guides your decisions but also impresses potential investors and lenders by demonstrating foresight and preparation.

10. Industry Regulations

Most industries have their own set of regulations. Some examples are as follows:

• Food Business - Obtain the food hygiene certificate and registration from the local council.
• Construction Firms - Adhere to the Health and Safety Laws, including proper training and equipment for your staff.

These are those industry-specific rules that are often backed up by fines or even legal consequences in cases of non-compliance. Do proper research and, if required, consult with an expert to get more information.

11. Form Business Associations

Networking is the secret to growth. Join local business groups, attend trade shows, or partner with businesses that complement yours. Stronger relationships will result in referrals, partnerships, and visibility.

Conclusion

Company formation of your Limited Company itself is but the first step. In fact, the post-registration discussed activities, ranging from opening the business bank account to providing an online presence, will deliver solid grounds for successful development. Being well-organised, compliant, and proactive is the master key to achieving your objectives.