How Much Does It Cost to Set Up a Business (LTD Company – New Venture) in UK?
While a given portion of the existing limited companies is as a result of an expansion of small-scale businesses, mergers and sole proprietorships, individuals with the financial muscle to fund the startup and running of limited companies choose to set up the industries once and for all.
Apparently, a company with no history must undergo a series of registration and license for it to have the legal go-ahead to start its operations. It thus brings the aspect of company registration for those who are green about it.
Ways of company registration
There is a wide array that an investor can approach in the process of registering a business I the United Kingdom. They are as follow;
- Direct formation via the Companies’ House
- Company formation through an agent
- Getting an accountant to set up the company
Each of the above ways of company answers the question, “how much it costs to set up a limited company?” before indulging into that, we all know that involving middlemen in any business inflates the costs, and the more the middlemen, the more the costs are exaggerated! It’s a real converse of what most people believe and perceive about intermediaries and therefore, eliminating participation of intermediaries brings down the costs of setting up a limited company significantly.
The real costs
Having noted that eliminating intermediaries bring down the starting capital, let’s ponder the values of each avenue of setting up a company. However, it’s critical to note that each of the ways has distinct costs depending on their features.
Let’s dive in!
Direct formation via the Companies’ House
As the name suggests, limited companies are established at the Companies’ House directly without involving any form of intermediaries. The process is possible on the web and takes approximately 24 hours, at a standard fee of £12.
Additionally, applicants who wish to have a 24-hour paper return turnaround pay £100. Conversely, paper returns that come after, approximately, 8 – 10 days’ pay £40.
Incorporating a company online requires the applicant to fill up a bunch of forms that5 constitutes form IN01. The details needed for a successful application are as follows;
- The company’s legit address
- Aspects of the stakeholders
- The company’s suggested share capital
All applicants are eligible to receive the “The companies’ rule book” and the Companies House Articles of Association. Concurrently, the Memorandum of Association is created stating that the individuals in question desire to form companies.
Company formation through an agent
Agents directly link an investor to the authorities. They majorly create templates for respective forms required to form specific companies so that when an investor approaches them, they merely fill in different details such as bank accounts and other personal information. They then charge a fee for such services.
Although agents make the company formation process easy, they highly inflate the costs at their rates; thanks to the fact that there’s no regulation of their pricing. The investor ends up paying more on top of the investment capital! However, these individuals are rampant online; you only need to click the search button, and a variety will be at your disposal.
Due to their professional know-how, accountants become instrumental in the company for the following individuals;
- Contractors and individuals who don’t know how to form and run businesses
- Individuals who are poor at company directing and management
It happens that accounts possess the necessary skills to run company businesses on behalf of their owner. The advantage to the investor is professionalism at very high costs paid to accountants in charge of the market.
In this case, accountants will ask for an off-set-up charge, excluded from the standard wage they receive. Therefore, when hiring an accountant to set up a company, one should consider parting ways with a considerable amount of money.