Author Archives: Henna Nazir

What is a Company Registration Number

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A Brief Guide on Company Registration Numbers

From 2021 to 2022 there were 753, 168 company incorporations recorded by Companies House. This was a slight decrease of 7.1% from the data in 2020 to 2021, despite the expectations that there will be more incorporations during the pandemic. The executive agency has put easements in place to give businesses more time to arrange their affairs.

As a business owner, there are a few things you need to do to stay compliant with government regulations. One of these is registering your company with Companies House. This article is a brief guide on company registration numbers and what they mean for your business.

What is a Company Registration Number?

When you set up a new business, you first need to obtain a company registration number from the relevant authority in your jurisdiction. This eight-digit number uniquely identifies your company and is required for various legal and administrative purposes.  It’s also worth noting Companies House is the registrar of all UK Limited Companies as well as the provider of the company registration number. 

In most countries, the company registration number is issued by the national registry of companies, which is typically part of the ministry of justice or commerce. In some jurisdictions, such as the United Kingdom, the registration number is also known as a “company number” or “corporate number”. 

In other jurisdictions, such as Ireland, it is called a “CRO number”. Regardless of what it is in your jurisdiction, this number is an integral part of your company’s identity and should be prominently displayed on all your business correspondence.

Why is it Important?

A company registration number is essential due to being the primary company identifier. It’s possible that two or more businesses have similar names, and/or that individuals are conducting business under slightly similar names as your limited company. The company registration number is what separates one company from another and validates it as a legal entity.

The number can also verify a company’s financial status. By having your identifier,  you build trust and credibility with stakeholders. It also makes it easier for customers and suppliers to find your business contact information. 

How to Find Your Company Registration Number

Company-Related Documents

If you’re unsure where to find your company’s registration number, the best place to start is your paperwork. Check documents such as the Certificate of Incorporation, annual accounts, and tax returns.

Companies House

Another option is to simply enter the company’s name into the search bar of the Companies House website. The registration number will be displayed in the search results. Once you have the registration number, you can look up information about the company, such as its filing history, officers, and registered address.

Company Admin Portal

If you worked with a company formation agent, you can log in to their portal and use the search bar and filter features to find your company registration number. Businesses formed with Companies MadeSimple can log in here and select “My Companies”. Your registration number will appear on the next page. 

Helping Businesses Thrive

Company registration numbers are like fingerprints—each is unique and helps to identify a company. Overall, having a company registration number is essential for any business owner who wants to protect their assets and create a successful enterprise.

Companies MadeSimple will handle all the legalities of company formation so you can focus on what you do best—running and growing your business. Learn more about our services by visiting our website or contact us for more information.

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How to pay yourself from a Limited Company

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You are entitled to various benefits and perks as a limited company director. One of the most valuable perks is being in charge of your salary. This means you can set your salary within certain limits and take advantage of other benefits. However, knowing how to pay yourself from a limited company can be confusing if you’re unfamiliar with the process.

This article will explain how to pay yourself from a limited company. We’ll review the two major options available and help you decide which is best for you.

How to pay yourself through PAYE

PAYE, referred to as Real Time Information (RTI), is the system that most employees are familiar with. PAYE generally works by you, as director, paying yourself a salary through the payroll system. This salary is taxed at the appropriate rate, and National Insurance contributions (NICs) are deducted.

Advantages of the PAYE scheme:

  • You will have a regular income taxed at the correct rate.
  • You will build up a state pension record.
  • You can take advantage of other benefits such as company pension contributions.
  • You will have no extra personal tax bill or tax return to complete.
  • You will not have to worry about late payment penalties.

Disadvantages of the PAYE scheme:

  • The PAYE scheme is not as tax efficient as other payment methods, such as dividends.
  • Your ability to extract cash from the company may be limited by how much you can afford
  • If you are a higher-rate taxpayer, you will not be able to use your allowance fully.
  • PAYE is not flexible since you are required to report on or before you pay yourself.

PAYE is a popular option because it is relatively straightforward. However, there are a few things to be aware of before you choose this method. For example, you will need to ensure that you correctly report your salary and pay the right amount of tax.

How to pay yourself through dividends

As a limited company director, you also have the option to pay yourself through dividends. Dividends are a distribution of company profits and can be an efficient way to take money out of your company, particularly if you are a higher-rate taxpayer.

This option assumes that you also own shares in your company and have sufficient profits available to make the dividend payment. If you have a separate regular job paying you through PAYE, taking advantage of dividends is generally the most popular way to pay yourself as a director. That’s because you don’t need to pay National Insurance contributions (NICs) on dividends, and the tax rate is usually lower than your marginal income tax rate.

Advantages of the dividend scheme:

  • Dividends are a more tax-efficient way to take money from your company.
  • You can be flexible regarding when you take dividends.
  • It’s cheaper than salary, especially if you are a higher-rate taxpayer.

Disadvantages of the dividend scheme:

  • You need to have sufficient company profits available to make the payment.
  • You may need specific paperwork to prove to HMRC that the dividends are fair.
  • You need to be a shareholder to take advantage of this scheme.

It’s possible to combine the two methods

You don’t always need to choose between PAYE and dividends – you can use a combination of the two to suit your needs. For example, you might choose to take a small salary through PAYE and top it up with dividends. This can be a good way to reduce your tax bill and still take advantage of the benefits of PAYE, such as building up a state pension.

Talk to an accountant or financial advisor if you’re unsure about the best way to pay yourself. They will be able to help you choose the most tax-efficient method for your circumstances.

At Companies Made Simple, we can help with all aspects of starting and running your limited company, including accountancy consultation and VAT registration assistance. Get in touch with our team today to discover the right limited company solution for you.

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What is a Limited Liability Partnership?

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What Is a Limited Liability Partnership?

Are you considering running your business as a limited liability partnership in the UK? This guide will tell you what you need to know about a limited liability partnership, how it is formed, and its differences from limited companies.

A limited liability partnership or LLP is a hybrid business structure or legal entity formed under the Limited Liability Partnerships Act 2000. The Act came into effect on April 6, 2001. LLPs must comply with regulations such as the Limited Liability Partnership Regulations 2001 and the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009.

How Is an LLP Formed?

Limited liability partnerships (LLP) can be formed by registering the LLP with Companies House, the official Registrar of Companies in the UK.You can form a limited liability partnership with two or more members to make a profit. That means that non-profit or charitable organisations cannot establish an LLP. Members must come up with a written agreement that indicates conditions on how the business will operate, including profit sharing, dispute settlement, and member responsibilities.

Members or partners do not need to be UK residents, but the registered office address of the LLP must be based in the UK.

An LLP is taxed like a partnership. Designated members pay tax depending on their share of the profits but are not personally liable for the business’s debts. Accountants, solicitors, surveyors, consultants, architects, and other professionals prefer a limited liability partnership since it offers the benefit of protected liability and allows them to keep their individual earnings, as opposed to a limited company with shareholders.

The steps you need to take in setting up an LLP are as follows:

  • Have at least two designated members
  • Choose a name
  • Have a registered address
  • Create an LLP agreement
  • Register your LLP (you can use Companies Made Simple for easy set up)

LLP Registration

Most LLP registrations are now done online. Companies Made Simple provides a full suite of services for aspiring entrepreneurs and industry professionals who want to set up a business or partnership. If you’re interested in registering your LLP with us, we need these details from you:

  • Name of the LLP
  • The country where the registered office is located
  • The address of the registered office
  • The names and addresses of all members

Naming Your LLP

Your name must end in “Limited Liability Partnership” or “LLP” and cannot be the “same as” or “too like” another registered company’s name.

“Same as” Names

“Same as” names are names where the only differences from an existing name are either one of the following:

  • punctuations or special characters, like the “plus” (+) sign
  • a word or character similar in appearance or meaning
  • a word or character used in UK company names (“company” or “co”)

Example: “Alluring Scents Ltd” and Alluring Scents, UK” are the same.

You can only register a “same as” name under the following conditions:

  • your LLP is part of the same group as the company or LLP with the existing name
  • you have written confirmation that the other company has no objection to your name

“Too like” Names

You may have to change your name if another company complains that your name is “too like” theirs.

Example: J & K Consultants Ltd and J and K Consulting Limited

See tips on how to choose the best name for your business.

LLPs versus Limited Companies

An LLP is neither a partnership nor a company. A limited liability partnership is similar to a limited company in the following criteria:

  • Is a legal entity separate from its members
  • It must be incorporated with Companies House either directly or through a company formation agent like Companies Made Simple.
  • It must file a Confirmation Statement and Annual Accounts every year with Companies House.

A limited liability partnership differs from a limited company by the following criteria:

  • Is solely for profit-making businesses
  • There must be an LLP agreement stating how the LLP will be run
  • Must have at least two designated members who are responsible for statutory filing and other requirements
  • Its structure is flexible and can be modified by their members
  • Does not pay corporation tax

Set up Your LLP Now

Companies Made Simple has formed over 1 million companies. The entire process can be done online, quickly and easily. Our LLP setup service includes registration with Companies House in as little as three working hours, a free LLP agreement, a printed certificate of incorporation, and a free domain name.

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What is a Company Limited by Guarantee?

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What is a Limited by Guarantee Company?

Limited by guarantee companies are commonly adopted by nonprofit organisations such as charities, sports associations, community projects, societies, and other similar entities. This type of structure does not have shares or shareholders, as opposed to limited by shares companies. This means that all profits earned by the company are reinvested for different purposes.  In the UK, private limited by guarantee companies make up 2.6% or 125, 478 of corporate body types on the total register from 2020 to 2021.

Benefits of Trading as a Company Limited by Guarantee

A company limited by guarantee is a separate legal entity from its owners and is therefore responsible for its own debts. Owners choose to have their nonprofits registered as a limited by guarantee company to benefit from limited financial liability. Since the nature of these companies is not to make a profit, they forfeit their right to apply for charitable status when profits are distributed among owners.

Usually, the main reason nonprofit organisations opt to be a company limited by guarantee is to protect the people from unpaid debts. Some charities, clubs, and groups operate on a large scale and carry many liabilities. If their expenses cannot be covered by their income, the organisation is likely to dissolve. Without the protection offered by the law on guarantee companies, the people in management or the committee would be personally liable for the organisation’s financial losses.

How Does a Limited by Guarantee Company Raise Funds?

Limited by Guarantee companies are categorised as follows:

  1. Having share capital – the company is set up with some initial capital or working funds from members. Once operations begin, normal working funds can be sourced from fees, charges, and subscriptions.
  2. Not having a share capital – the company raises initial capital and working funds through various sources, such as endowments, fees, subscriptions, grants, or alternative funding streams like asset-based borrowing. Guarantors are also responsible for contributing an agreed amount in the event of insolvency.

Limited by Guarantee Company Structure

A company limited by guarantee is like a private company limited by shares. However, a Limited by Guarantee company does not have shareholders. The company must have one or more members and assign at least one director. Members are encouraged to attend meetings and vote to appoint or remove directors, form committees, and set different levels or classes of members.

Setting up a Company Limited by Guarantee

You can set up a guarantee company by registering it at Companies Made Simple. Here are the requirements:

  • The names and addresses of director/s and guarantor/s
  • Details about People with Significant Control (PSCs) or beneficial owners who own or control your company
  • The company’s name
  • A registered office address
  • A statement of guarantee which indicates the amount of guarantee by each member
  • The company type and nature of activities
  • The memorandum and Articles of Association (agreements, rules, and regulations agreed upon by the members)

Our Limited by Guarantee Company Packages

Companies Made Simple makes the registration process easy and hassle-free. We offer fast online formation in as little as three hours (subject to Companies House workload). Our limited by guarantee packages include:

  • Companies House registration fee
  • Printed Certificate of Incorporation
  • Digital Memorandum and Articles of Association (M&A)
  • Business Startup Toolkit (with free domain name)

Get Started Today

Form a company limited by guarantee with the help of a company formation agent like Companies Made Simple. Learn more about our limited by guarantee service packages.

 

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What Is a Dormant Company?

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What Is a Dormant Company?

Companies not engaging in business activity or generating revenue through trading are tagged as “dormant” or inactive. However, they must still be registered under Companies House for tracking purposes. Dormancy can take effect from the date of incorporation or after a trading period.

Additionally, businesses that have permanently ceased trading and reported accordingly to HM Revenue & Customs (HMRC) are considered dormant because of corporation tax.

What is Considered “Trading”?

During dormancy, an organisation cannot trade or receive any income. Failure to comply forfeits their inactive status and will be required to prepare statutory accounts.

Some examples of trading activities include:

  • Buying or leasing of property 
  • Buying and selling of goods and services
  • Employing or hiring staff members
  • Managing investments
  • Accepting dividend payments
  • Issuing shareholder dividends
  • Obtaining interest on paying
  • Using the company’s bank account to cover accounting costs and legal fees

Common Reasons for Dormancy

UK businesses file for dormancy status for various reasons, such as:

  • It is a new company that hasn’t begun trading
  • It is an ‘off-the-shelf’ or ‘shell’ company held by a company formation agent intending to sell it on
  • It was formed to own an asset such as land or intellectual property so it will never trade.
  • Restructuring of a previously active organisation
  • Reserving a business name before the company’s launch
  • Protecting a business name from being registered by another company
  • When the business owner wishes to take time off due to travel, illness, maternity leave, a sabbatical, etc
  • It is a company that’s no longer trading and destined to be removed from the Companies Register

While a company can remain dormant for an extended period, certain obligations must still be fulfilled with the Companies House. This includes updating your company’s details, filing annual confirmation statements and dormant company accounts, and updating statutory records for public inspection.

How to Report for Dormancy

Companies who wish to declare dormancy or switch their status from active to inactive may do so by contacting the HMRC’s Corporation Tax office. You can find their contact details on the UK government’s official website or any of their issued letters. 

For previously active companies, expect a “Notice to Deliver a Company Tax Return” from HMRC. This must be accomplished for the Corporation Tax accounting period prior to the company becoming dormant. Note that profits made prior to dormancy are subject to corporation tax. 

Before declaring dormant status, ensure that employee payrolls and other outstanding bills have been taken care of. This includes employee wages, shareholder dividends, debits with service providers, and other transactions.

Requirements for Declaring Dormancy

1. Companies House Requirements – You do not have to notify Companies House when declaring dormancy. However, you are required to file an annual confirmation statement and dormant accounts. This will serve as your official notice to Companies House.

a. Accounts

For first accounts with a coverage period of over 12 months, the deadline is 21 months from the date of incorporation. Companies House sends notifications for filing, but it’s best to set your reminder to avoid missed deadlines.

b. Confirmation Statement 

An annual confirmation verifies the company’s critical details during a specific time, including: 

    • Business name
    • Director’s details
    • Registered office address
    • SAIL address (if applicable)
    • Company secretary details (if applicable)
    • Shareholders’ details
    • Details on issued shares

The first confirmation statement must be submitted 12 months after the company’s date of incorporation. Succeeding statements will be delivered 12 months after the previous statement’s confirmation date.

2. HMRC Requirements

Previously active businesses are required to file a Company Tax Return with the HMRC. Companies dormant since the beginning are exempted from this rule. 

After notifying HMRC, you will receive a Notice to deliver a Company Tax Return. This helps you identify the amount of Corporation Tax that needs to be paid prior to declaring dormancy status.

Work with a Trusted Company Formation Agency

Filing for dormancy can be made simple with the help of trusted experts. Companies Made Simple offers a fast and reliable way to declare dormancy. We offer multiple packages to suit your needs and budget. 

 

Learn more about our dormant company accounts packages.

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