What Actually is Incorporation?
Incorporation is the legal process of registering and forming a limited company. This means that, by law the company and the individual are separate from one another which gives added peace of mind. You can run a business while not being incorporated, however, when this happens, the individual and the business are treated as one and the same.
Why bother incorporating if I can run a business anyway?
When you go through the incorporation process your company becomes registered as a corporation. This can be an advantage to you as some other businesses will only do business with limited companies. As well as this, you, as a company owner, are protected financially. You may have heard of the term “Limited Liability”, once you’re incorporated, this comes into play.
If you run a business without being incorporated, you and the business are the same thing, the business’ debts are your debts. Once you’re incorporated, you and the company are different legal entities, the company’s debts are its own (up to a point).
Is there anything I need to know before making the decision?
If you want to be a limited company, you must incorporate through Companies House. This can either be a new company, or it can be an existing self-employed business.
Traditionally, a company name will have the suffix LTD or Inc. However, you don’t need to use this in your everyday branding and marketing.
There are more legalities involved than there would be if you were running a self-employed business. For example, you have to submit your annual accounts to HMRC, as well as file an annual confirmation statement with them.
How does the process work?
Anyone can incorporate a company through Companies House. However, many people choose to use a formation agent such as us, as we are able to simplify the process, and can sometimes be cheaper than going direct.
You first need to check whether the company name you want to use is available, only one company can be registered to a name. Also, you will need to say who the owner(s) of the company will be, and give some details about them, as well as submitting details about what the company will be doing.
Registration can be a straightforward process when you know what you’re doing and what you need to provide. Here at Company Wizard we aim to make the process as simple as possible and we’ll always make sure you have everything you need to incorporate your company.
Once everything has been sent off and approved you could be incorporated within a few days.
- 22 Oct 2021 - How Can You Avoid Creditor Pressure As A Director?
- 14 Oct 2021 - What Is Dividend Tax?
- 08 Oct 2021 - Is Being Self-Employed The Same As Being A Sole Trader?
- 29 Sep 2021 - Common Budgeting Mistakes Made By Startups
- 24 Sep 2021 - Misconceptions Of Setting Up A Business