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A Limited Company is an entity (business) created to be legally separate from its owners or stakeholders (usually shareholders and directors).

In the UK a Limited Company must be registered with Companies House - this provides a unique Company Registration Number, lists the company on the public register and means that the company must henceforth be governed by the regulations in the Companies Act.

A Limited Company may have only one shareholder or director, or it may have many - but it is considered a distinct legal entity. This means that any liability is held by the company not by the individual.

The main difference is that a Limited Company is considered its own legal entity and therefore liability is held by the company not the individual - usually limited by share value. A Sole Trader however is a single individual who holds unlimited personal liability.

A Sole Trader is essentially a self-employed person, registered through gov.uk, who is the sole owner of their business.

A Limited Company is a legal entity separate from its owners and shareholders, of which there may only be one or many.

There are a number of advantages to registering and trading as a Limited Company - one of the biggest advantages for many is that it enables you to pay less personal tax as a company will pay corporation tax rather than income tax.

Trading as a Limited Company is also safer as it is legally separate from its owners meaning that their personal assets are not at risk (as a Sole Trader there is Unlimited personal liability). If things go wrong you are only at risk of losing what you put into the company.

Once registered as a Limited Company it will appear on the public register and no other company can use the name. That is why the first step in registering your Limited Company is checking whether a company already exists with that name.

You do not need to be a UK national or resident to register as a Limited Company - and there are no restrictions on foreign nationals from being directors, shareholders or ​​company secretaries. You will however need to provide a UK address as the registered address of your company as this is where all official documents will be sent and this will be listed on the public register. Which is why we offer services so that you can use our prestigious London, Regent Street W1 address as your registered office address.

A company that is limited by guarantee is one that is setup ‘not for profit’ - most usually charities, clubs, churches and non-profitable organisations.

It is a company that is designed to have no commercial value. Therefore, it has no shares or shareholders. Any profits stay in the company or the community and cannot be shared out to officers in the form of dividends.

Rather than having shares and shareholders you instead have guarantors and a ‘guaranteed amount’ and all profits are reinvested back into the business.

You need at least one director and one shareholder. They can be the same person, as with most starting up. There is no upper limit to either, you can nominate as many as you like. Bear in mind though that Company Law states Directors have to be over 16 and when opening a bank account, it’s normal banking rules for Directors and Shareholders to be over 18.

A dormant company is simply a registered company that is currently not trading and a company can be left dormant for years as long as a confirmation statement and annual accounts are filed each year. Many people register a company with the intention to remain dormant to protect a chosen company name - as no other company can use that name once registered.

A company only becomes either officially dormant or trading when the first confirmation statement or accounts are filed at the end of the first year.

If you are setting up your Limited Company with the intention of it remaining dormant then we highly recommend our basic or seed package - we can provide services to file your annual accounts and confirmation statement yearly.

If you wish to dissolve (close) your Limited Company then you will usually require the agreement of the companies directors and shareholders.

The way you dissolve the company will depend on the financial state of the company - whether it can pay its bills or not.

If your company can pay its bills (‘solvent’) then you can apply to have the company struck off the companies register. This option is available as long as:

• it hasn't traded or sold off any stock in the last 3 months
• it hasn’t changed names in the last 3 months
• isn’t threatened with liquidation
• has no agreements with creditors

If any of the above apply then you will have to liquidate your company instead.

If your company cannot pay its bills (‘insolvent’) then the rights of those owed money to come before those of the directors and shareholders. You must apply to have your company liquidated.

There is no legal obligation to dissolve your company, you may wish to simply let your company become dormant - this happens when you have not traded or received income.

Wondering what the threshold is for VAT? Well in the UK you will need to register for Value Added Tax (VAT) once your annual VAT taxable turnover is over £85,000 (or you expect it to be in the next 30 days).

What is VAT taxable turnover we hear you ask - it is the total value of what you sell which is not exempt from VAT.

Once you have registered with HMRC you will receive your VAT number, date of registration and when your first VAT return and payment will be due.

From date of registration you will then need to make sure your business does the following:

• Charge VAT correctly on non-exempt goods
• Submit VAT returns
• Pay and VAT due
• Keep full records of your VAT returns

Though you will now need to charge your customers VAT at the correct rate you can also then claim back VAT on any purchases made for your business.

Registering for VAT can be pretty daunting, which is why we offer services to do this for you and we can even put you in touch with an accountant to help you keep on top of your finances.

You can use any address as long as it’s on mainland UK and it is a physical address, not a PO Box. For your consideration, the Registered office address is public. If you prefer to keep your personal address private we offer our presitgious Regent Street address for use as your registered office.

Directors run the company whereas shareholders own the company.

A Company Limited by Shares is the most frequently used kind of limited company and applies to most cases. A company limited by shares is designed for profit making businesses and ones which are able to accrue a commercial value. A company limited by guarantee is to be used for a non-profit making entity and one which is not designed to accrue a commercial value. Ideally suited to clubs, associations, churches and charities.

SIC stands for Standard Industrial Classification. It allows you to show publicly in what industry the company has been trading for the previous period, typically a year.