Post incorporation: Get the details right

So you’ve formed a new company - but what happens next? Jennifer Adams presents a checklist for ensuring that your new enterprise gets off on the right foot.
 
Once a company has been created (whichever method is used - see Company formations: What's best for you?) many directors of newly formed private limited companies make the mistake of thinking that that’s all there is to it.
 
Unlike a public limited company which needs to obtain a trading certificate, a private limited company can commence business immediately. However, certain matters do still need to be dealt with. This article lists the key points based on the assumption that the company has more than one director/shareholder and intends to become an employer. If you are aware of additional issues, please feel free to add your comments and suggestions below.

Priority

  • Open a bank account
  • As required forms need to be submitted online or sent to Companies House
  • Some or all of the directors may need service contracts
  • Consider insurance arrangements
  • Apply for registration - PAYE, VAT etc
  • Record initial information in the statutory book.

Not so urgent

  • Appoint accountants
  • Register for VAT when the annual limit has been exceeded.
  • Monitor company and business names.
  • Minute decisions taken at “board meetings” - especially for single or dual member firms
  • Attend a solicitor to create or amend a will to ensure that “personal representatives...have the right... to appoint a person to be a director”so the company can continue should the company have a sole director who dies.

About the author
Jennifer Adams FCIS TEP ATT is a freelance writer and author specialising in tax and company secretarial issues; she can be contacted at Abacus Business Solutions. The information contained in this article is intended to provide for general educational use and information only. It is not intended to advise or recommend any particular course of action or opinion. The reader should not act or rely on any information contained therein without seeking independent legal advice.

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Comments
Euan MacLennan's picture

You've already made your first mistake

Euan MacLennan | | Permalink

... by forming a company yourself, instead of asking an accountant to do it.  Do not compound your mistakes by attempting to notify Companies House of anything or to register for PAYE, corporation tax or particularly, VAT.  Do you even know what statutory books are?

Your urgent task is to appoint accountants.  Leave it to them to deal with the above matters and to advise you on the other issues.  The only thing that you need to do apart from that is to open a company bank account.

whilst the checklist is useful....

justsotax | | Permalink

i would agree with Euan....leave it to the client and inevitably something will get missed....and/or worse still they continue to treat the bank account as they did with their sole trade.....only for the accountant to have to pick up the pieces....so yes (1) seek professional advice....and this may also give rise to the question should you incorporate in the first place.....

freelance32's picture

Incorporation

freelance32 | | Permalink

 I agree with the responses - accountant preferable.  For example I encourage the use of LLP structures along side Ltds, or even keeping sole trader running re losses whilst newco beds down and clients get used to the issues that surround running corporates.  payroll...not always a good idea in year one - P45 income, dividends in first year again to mitigate payroll tax.  

Formation - so many times the DIY method on the internet results in very scant documentation..I use a formation company in Brighton, professional and full proof - good documents - enough for all parties, HMRC and bank included, plus on line for email and minutes all done and dusted, seal and registers.

When clients first disucss with me about incorporation - it can sometimes be a 2-3hour meeting becuase it isnt as simple as just setting up a company and off you go...its not always what the client really needs and can get them into a lot of financial difficulties.

Nevertheless - all points relevant and useful prompter.

 

 

JAADAMS's picture

Not a Mistake

JAADAMS | | Permalink

In an ideal world we would all want an accountant be appointed - preferably before the company is purchased from the previously used formation agent.

But the text was specifically written to follow on from the previous article ‘Company formations - what’s best for you?’ ie the director has already purchased/ created the company him/herself.   Under the ‘comments’ section of that article ‘matMSG’ asked for ‘a section on post Company Formation’ - so I obliged.I wanted to list the extra that needs to be done - the director of the newly formed company might not be aware even if they use an accountant (as they would do almost everything for him/her!) I agonised as to whether to make appointing an accountant a ‘priority’ but when writing the main points were to see what needed to be done should one not be appointed immediately.

Euan MacLennan's picture

Mmm ...

Euan MacLennan | | Permalink

I think you would have done better to identify just two priorities (appoint an accountant and open a bank account in the company's name) and then go on to list all the matters that the accountant would need to deal with, before finally listing your other worthwhile, but not necessarily essential, points (service contracts, insurance, will, company seal, etc.).

I am also distinctly unsure about your advice for the company to reimburse the formation costs.  Your DIY OMB might think that means that the formation costs would be a tax-deductible expense against the company's profits.