What is a company?
A limited company is a separate legal entity which is formed by one or more individuals under the Companies Act legislation. Ownership of the company is via the individuals concerned having ownership of the shares. For private companies these shares are not made available to the public. In small businesses the share holders can also be the directors of the company and control and manage the business. The advantage of a company is predominantly in limiting the liability, in the case of financial difficulty, to the assets contained inside the company. The giving of a personal guarantee (for example by a director to the company’s bankers) will negate this advantage.
It is strongly recommended that a shareholders’ agreement is put in place. This would normally set out the position on what the shareholders can do when certain situations arise, for example, retirement, sickness, death etc. Advice should be sought from us in the first instance in this connection.
Company secretarial services
If a business is carried out via a company or a limited liability partnership the Companies Act 2006 and the Limited Liability Partnership Act 2000 place obligations to maintain and submit to Companies house certain statutory documents. Failure to comply with deadlines results in punitive penalties. We offer you peace of mind by carrying out your company secretarial obligations and ensuring that the legal obligations are wholly complied with.
Preparing bookkeeping records can be a time consuming and onerous task for business owners; we can help with all your general bookkeeping requirements either at your offices or at ours. We can either employ our own in-house expertise or help you recruit the right person for your business.
Regular management information is a vital aspect of managing and controlling a business. We will endeavour to work closely with you to get to know your business so that we can advise on how to maintain and improve profits as the business grows and develops. Monthly or quarterly management accounts can be prepared to enable you to manage your business.
For turnover in excess of £85,000 it is compulsory for most businesses to be registered for VAT although it is possible to register voluntarily below that limit. All VAT registered businesses now have to prepare return forms (generally each quarter) and submit them online under the Making Tax Digital regime (MTD). MTD requires that book keeping records are kept on compliant software and this is why we recommend the Xero cloud based system for the majority of our clients. We can deal with all aspects of your VAT requirements and ensure that the VAT regulations are fully complied with. Our VAT services cover registering and de-registering for VAT, preparation of accurate VAT returns, review of assessments and ascertaining whether the VAT flat rate scheme would be appropriate or advantageous.
Employing staff results in a legal requirement to operate a pay as you earn (PAYE)/real time information ( RTI) scheme and also apply an employer pension scheme under the auto enrolment system. We offer a payroll service using software and this involves a weekly or monthly service, advising on the PAYE and national insurance deductions, calculating the pension contributions, issuing payslips, forms P45 and P60. In addition the year end PAYE report is automatically prepared by our systems and ready for online submission
Annual accounts have to be prepared for businesses that comply with the Companies Act. These accounts have to be submitted to Companies House within 9 months of the accounting year end and to HM Revenue & Customs within 12 months from the year end. These accounts will summarise the overall commercial position of the company for, normally, a 12 month period and though they are historic can be used to make decisions about the business.
Trading companies pay 19% corporation tax on their net profits. Arriving at appropriate structures e.g. groups of companies for larger businesses will take into account both tax considerations and the commercial position. On an ongoing basis great care has to be taken to arrive at a tax efficient balance for a business.