Responsibilities of Running a Company
You need to ensure that your company is meeting all of its compliance requirements for HMRC and Companies House. In order to help you do this, it may be beneficial to set up some best practice guidelines.
Having a limited company means that your business is its own legal entity, however, this doesn't mean that it's able to run itself. You'll need to familiarise yourself with your ongoing responsibilities and make sure you are meeting all of your obligations.
So what is a limited companyA limited company is different from a sole trader business because it has its own legal status and is separate from the people that own and run it. It can be beneficial having this set up as your financial assets are protected should something happen and the business needs to be shut down.
Another positive of forming a limited company is that after tax, your profits are your own. You can use them to pay a salary, re-invest into the company, hire staff, take on more shareholders - anything you want to do.
What to do once your company has been formed
Once your company has been formed, you, as a director, will need to make sure you meet with all of your compliance needs. If you fail to meet with any of the requirements, you may face hefty fines, or face being closed down.
Companies House will issue you with a Unique Tax Reference (UTR), that you will need to use with HMRC in order to register for Corporation Tax. You will also need it if you begin to charge VAT and/or employ staff through a PAYE scheme.
Set up business banking
A registered company needs to keep its finances separate from that of the finances of the directors. For this reason you will need to set up a business bank account once your company starts trading. By having a business bank account rather than a personal one, you may be able to secure better rates on loans, this is because your company is seen as legitimate and therefore less of a risk to lenders and creditors.
All businesses now have to make sure they stay on top of their data protection procedures, or face hefty fines handed down to them. All data needs to be protected, which may include customer data, staff data, or anything deemed as sensitive.
Even if you only have one member of staff, you will still need to have Employer's Liability Insurance. There may be other forms of insurance you will need and these can depend on the industry you are in. To find out what type of insurance you may need, check out our previous post: Do I need business insurance?.
Your annual responsibilities
Running a limited company involves much more paperwork than what's needed for a sole trader. This includes filing a Confirmation Statement every 12 months. This needs to be done even if your company is dormant. It's used to inform Companies House that your details are correct and up to date.
There are other documents that you will need to file on an annual basis through Web Filing. Web Filing can be used for sending documents such as:
- Annual accounts
- Change of company details
- Dormant (inactive) accounts
- Appointment / removal of secretaries and directors
- Copies of resolutions
- Share's allotments, and
- PSC register changes
In order to use Web Filing, you will need to register with an email address and requesting a confirmation code. This code will be the same (electronic equivalent) as a signature for the director.
Some documents can also be filed through Company Wizard too, allowing you to manage your company from one place.
Hopefully this post has opened your eyes to some of the responsibilities that you need to carry out as a company director. Once you know what you need to do, you can build up your policies and practices in order to keep on top of the requirements.