There is a rise in the number of people interested in becoming entrepreneurs in the UK. It is an exciting trend that should be encouraged. However, you should understand what it takes to maintain a limited company in the UK.
In this article, we will write about owning a limited company, your responsibilities as the director, documents to file and annual obligations in the UK. No worries, maintaining a limited company is not an impossible task. All you need to do is adhere to the rules of global subsidiary management.
What is a Limited Company?
A limited company is best described as a legally recognized brand owned by one or more shareholders. However, it stands out from other types of companies in the UK because you can separate your assets from the company’s assets if you are a shareholder.
Therefore, all records and business activities are done regarding the company as an independent legal brand.
A director manages the affairs of the limited company, following the shareholders’ decisions. To become a director in this company, you must be nominated and approved by the shareholders.
Also, each shareholder in a limited company is entitled to dividends. This is their reward from business profits earned over a specific time.
Annual Obligations of a Limited Company
To continue operating in the UK, the director of a limited company must meet annual obligations specified by the government.
These obligations are as follows:
- Submit a Confirmation Statement: This document highlights information such as a letter indicating the shareholders with controlling powers in the company, usually called a PSC register.
- Notification of Changes Within the Company: The annual filings must include official letters indicating changes to replace the company’s director or secretary.
- Corporate Tax Return: The Form CT600 for tax returns must be presented annually to the HMRC.
- Financial Account Statements: This is another essential document submitted annually to avoid penalties.
Documents Required at the Companies House
In the UK, the Companies House is in charge of company registrations. They have the power to manage company registration details, provide this information publicly when necessary, and award incorporates licenses to new companies. Decisions to revoke limited company licenses also come from the Companies House.
As the director of a limited company, it is mandatory to present the following documents to the Companies House:
- Letter of Incorporation, Form IN01
- Memorandum and Articles of Association
- Financial account statements
- Confirmation statement
- Statutory Register
- Documentations indicating changes in board of directors
- Documentation displaying legal issues involving the limited company
- Documentation showing adjustments to the limited company’s share capital
- Registered company name and location.
- Copy of letters for significant appointments to the board of directors.
Overall, the Companies House requires all essential documents detailing the limited company’s business and changes in structure.
Physical Documents to Hold in the Limited Company
It is essential to keep some crucial physical documents of the limited company. These records include documentation of assets, inventory, income, and expenditure.
On average, records for accounting should be kept for 6 years. Also, minutes for meetings should be stored for 10 years, while the company registers are lifetime records. The company secretary is responsible for keeping these records. Some company secretaries offer legal entity management.
Therefore, physical documents to be kept at the limited company include:
- Employment letters for director and top managers
- Shareholder register
- PSC register
- Company’s meeting minutes
- Receipts for sold shares
- Indemnity letters signed by directors
- Records of debenture signatories
- Records of share capital
Overall, managing a limited company requires secretarial work and accurate record keeping. It is essential to file all necessary documents at the right time. This shouldn’t be an issue if you have a competent company secretary. Also, the companies house and other related establishments have customer care systems, so you can ask questions whenever you are unsure about anything related to limited company documentation.