Cost of Registering a Limited Company: What You Need to Know
The cost of registering a limited company involves filing fees and possibly paying a company formation specialist like those at Companies House.3 min read
2. What Is a UK Limited Company?
3. What If I Want to Do My Own Registration?
4. How Can a Formation Agent Help Me?
5. How Much Does It Cost to Set Up a Limited Company?
The cost of registering a limited company involves filing fees and possibly paying a company formation specialist like those at Companies House, the United Kingdom's Registrar of Companies. If you are someone who likes to do the legwork yourself, you can set up your new business on your own. However, if you don't have time to go that route, you can choose to hire an experienced company to handle it for you. Either way, you can complete the procedure for a reasonable cost.
The technical term for setting up a limited company is called setting up, incorporating, or registering a limited company. It is also known as company formation.
What Is a Limited Company?
A private limited company is a business entity that is privately owned. In order to register an entity like this, you must have two directors and two shareholders. However, the four roles don't have to be filled by four different people. One person can be both a shareholder and a director, so the number of individuals can be as few as two and as many as 200.
The major benefits of organizing as a private limited company are to limit the liability of a shareholder for unpaid debts and to establish a separate legal identity. In this way, a private limited company brings together the legal protections available to a large corporation with the simplified administrative processes of a small business.
Private limited registration is the method of choice for entrepreneurs looking for startup cash from angel investors because it covers all the legal bases. The procedures and paperwork are minimal so you can get the company up and running quickly. Private limited registration is also the best option if you're looking to operate or raise money internationally.
What Is a UK Limited Company?
A UK limited company is a specific kind of business described in the statutes and regulated by the Companies Acts as passed by Parliament.
What If I Want to Do My Own Registration?
If you want to register your limited company on your own, follow these steps.
- Visit the website of the state government to start the process.
- Get a federal tax number from the Internal Revenue Service.
- Submit your meeting minutes or operating agreement to the appropriate state agency.
How Can a Formation Agent Help Me?
Hiring a formation agent to help you establish your limited company costs money, but you can get a great deal of value for your dollars.
- A formation agent knows the rules and helps you avoid mistakes that cause delays.
- If you need a referral to another type of professional, like an accountant, for example, your formation agent can help you find a qualified provider. Many contractors use an accountant for setting up the company. If you're new to the world of limited companies, this removes a great deal of hassle from the process.
- The agent can look over documents before you submit them, reducing delays.
- Some documents may need to be expedited. The agent can help you determine when that is worth the extra expense.
- You're less likely to run into regulatory issues if you have a competent agent representing you.
- If you're new to the process, you may not understand all of the steps. The Secretary of State's website doesn't always describe the procedures very well. The formation agent knows all the ins and outs.
- If the role of director is intimidating to you, a specialist in the field can answer your questions.
How Much Does It Cost to Set Up a Limited Company?
If you're hiring a specialist to do the legwork for you, the cost to set up your corporation or LLC varies based on how much of the process you want the service to handle and how much you want to do yourself. It's a common misconception that setting up a company is expensive and difficult. In truth, running a business does require some level of administration, and the directors of a limited company do have more statutory responsibilities than a self-employed person. However, the establishment of the business doesn't have to be expensive or very complicated.
If you need help with the cost of registering a limited company, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.