Making a move from self-employed freelancer to a limited company is regarded by many in business as a rite of passage. Nothing much will change in your day-to-day schedule, but the way you are taxed will change because your business will be its own entity – a company. As a Director of that company, you will also have new responsibilities. This is a new challenge, but one you should be able to conquer with your experience and passion. Here’s how to get started out right in bitesize steps.
Step 1 – Incorporate
The first step is incorporating your new company. The process involves choosing a company name, choosing directors, shareholders and a company secretary, preparing documents on how you will run your company, and finally registering everything with Companies House to make it official. This takes around 30 minutes online.
Top tip – you can cut the registration time from 30 minutes to 10 and guarantee nothing gets missed with the MachFast app. It’s free to download and lets you search for company names at the same time you register with Companies House. We’ve ordered everything up for you and will submit your application in hours. Find out how it works here.
Step 2 – Notify HMRC
HMRC needs to know you have changed the legal structure of your business, in this case from sole trader to a limited company. Get started here. You will also need to notify HMRC when you stop being self-employed (with a limited company, you will are classed as an employee of your own company for tax purposes). Notifying HMRC is a relatively simple task and once done will set you up for communication from them.
Step 3 – Setup a business current account
You usually have to wait for your company to form before opening a business current account. With the MachFast app, you can start your business current account application with a few clicks. We have partnered with CashPlus to open a business current account for you quickly. CashPlus is a leading UK small business account provider. You can read about them here and about their current account here.
Not all current accounts are created equal. What you want is fast approval and fee-free banking for at least a year. You also need a debit card. Once you have these, nothing is stopping you from getting down to business.