Are you Ltd yet? What’s behind those 3 little letters

At a certain point in the life of any business, you may come to a crossroads. Would you be better off as a Limited Company, or a Partnership?

Choosing the Right Path for Your Business

Deciding how your business operates is a significant, potentially life-changing choice. Assess the pros and cons carefully

Once you reach a certain level of profit, registering and running a Limited Company makes sense. It means you’re not personally liable for the business, you can operate more tax-efficiently, and you often have more professional opportunities afforded to you than a sole trader would.

A Limited Company is a separate legal entity to you. That’s good, because you’re not personally liable for debts, if the business runs into trouble. However, the directors may be held personally liable if they take any action or omit taking an action that worsens their creditors’ position.

But if you treat the company bank account as though it were your personal bank account, even if you own 100% of the shares, you could still run into problems.

We always say, treat your Limited Company as though it were the third person in the room, and you shouldn’t go far wrong

To help make sure you’re covering all the bases; these are some of the questions you’ll need to ask yourself with indicators of how we can help:

In any endeavor, it’s essential to approach it with a comprehensive and systematic mindset to ensure success. To help guide your efforts and make certain you’re addressing all necessary aspects, it’s crucial to ask yourself a series of critical questions. These questions serve as indicators, helping you identify areas where assistance or guidance may be required.

How do I become a Limited company?

We’re happy to help you answer that question with some clear, practical advice, and we love to be part of the start of your journey.

The bottom line is, you need to tell Companies House and HMRC that you’re setting up as a Limited company, and you need to incorporate your company, this is the official term for registering your business with Companies House. This is a legal requirement.

If you’re starting a Limited company, our Incorporation services ensure you complete all the Companies House forms, inform HMRC, check that the share structure is correctly set up if you’re in business with other parties, and file everything with Companies House on your behalf. All newly formed Limited companies need to file Statutory Accounts within the first 21 months of business.

Many of our clients start as sole traders, using us to look after their Self-assessment Tax Returns. When the time’s right we have helped many new business owners on the journey from start-up to Limited company.

Do I pay different taxes as a Limited company?

We’re happy to help you answer that question with some clear, practical advice, and we love to be part of the start of your journey.

Since the Limited company is a separate legal entity to you, the company will pay Corporation Tax, and you will still file a Self-Assessment tax return as an individual.

Having a proactive strategy to plan for Corporation Tax, Employee Income Tax, National Insurance, and VAT is part of our Tax Planning Services. We’ll keep you ahead of the game, so you don’t suddenly face a larger tax bill than you were expecting

Should I register for VAT right from the start?

Sometimes it can make sense to VAT register from the outset, rather than register at the point where your turnover is taking off. We’ve got a complete suite of services for any size Limited Company. Once your VAT registered, our VAT Services can forecast how much you’re likely to owe, and even help you set up an additional separate bank account to save the VAT into directly.

Does the company need a separate bank account?

Yes – and we’re happy to help you set that up. To keep the tax man happy, and your business compliant and efficient, you need to decide how you’re going to keep records, and the best way to look after your bookkeeping. Our Bookkeeping Services can advise and train you on the best online platforms such as QuickBooks or Xero – offering practical support in language that’s clear and easy to understand.

Can I employ staff?

You can, and as you grow, you’ll need to! Once you’ve got more than 2 or 3 people working for you, it often pays to hand over managing your payroll so you can get on with growing the business. Our Payroll Services handle every aspect of the pay run, from processing the payroll, producing the payslips & all the required paperwork for staff or subcontractors, tracking overtime and annual leave.

How will I know how my new business is doing?

Using thoroughly prepared financial statements. We’re very experienced at preparing profit and loss statements and interpreting that data to add real value to your business. Going forward, many of our clients’ request from us in-depth Management accounts to answer key questions about profitability and growth potential.

Why Pi?

We’re not your average accountants

Accountancy doesn’t start and stop at the tax-year end or your financial year end. We don’t just want to know your projected turnover in the next 6 months. We want to get to know you and your business, so we can support and advise you to help you make the right financial decisions at the right time.

We see every service we offer – from Incorporation, Profit and Loss Accounts, Management accounts, down to the Corporation and VAT returns, as tools. Those numbers and that data gives us an invaluable snapshot of your business right now, which means we can shape the future of your business.

Going Limited?

Get in touch with us by using our contact us pages if you’d like to find out about if you’d like to find out about any of our services. We understand that every situation is distinct, and by initiating this contact, you take the first step towards a more informed, effective, and successful journey.

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