Limited companies

There is one main rate of corporation tax of 19%.

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General duties of directors

The general duties required of a director are set out in seven sections of the Companies Act.

Directors' service contracts

The company is required to keep directors' service contracts or any memorandum of terms at the company's registered office, or at any place specified under section 1136, as section 229 confers rights on members to inspect a request copies.

Directors' liabilities

Companies Act provisions protecting directors from liability

Appointment of auditors

An auditor of a private company must be appointed for each financial year of the company, unless the directors resolve otherwise on the grounds that audited accounts are unlikely to be required.

An auditor's rights to information

Auditors are appointed by the members and are accountable to them. As a result it is important that auditors are given the information they consider relevant to the fulfilment of their duty to members.

A company's members

The Companies Act requires that all companies must keep a register of members

Director's transactions requiring members approval

Where a service contract is, or maybe, longer than two years. This is a complicated area of the Act and we recommend that advice be sought with regard to long term service contracts.

Directors' report

One of the requirements of the Companies Act is that the approved accounts must include a directors' report

Signing of accounts: directors and auditors

Subject to certain exemptions, a company that meets the small company criteria in respect of a financial year is exempt from the requirement to have an audit of accounts for that year.

Records of directors' meetings

The Companies Act requires a company to keep records of its director's meetings. The responsibility for these records rests with the company's Board of Directors.

Financial year

A company's financial year is determined by its accounting reference date in each calendar year.

Group accounts

The requirements of the Companies Act regarding the preparation of group accounts are based on the company's size.

Company secretary

A private company is not required to have a secretary, while a public company must have a secretary.

The tax system for companies

How the tax system works for companies.

Forming a limited company

Although you can set up a limited company by buying a company online or 'off the shelf', it is usually advisable to seek our professional advice. There are so many options and pitfalls we strongly recommend working with us on your new business venture. Is it advisable to use a limited company? What are the tax benefits and consequences?

Pros and cons of limited companies

We are often asked, 'Should I form a limited company?' The reality is that there is no easy answer. Each situation has to be judged individually. Our guide provides an overview of some of the key issues relating to a business trading as a limited company.

Buying a company 'off the shelf'

If time is an important factor, you can consider buying a ready-made company. The procedure will depend on the company formation agents', including online agents, requirements.

Tax and the company car

Details of how the tax system charges tax on a company car.

Company bonus or dividend?

In many small companies, the owners are also the directors, and this gives importance to how income is extracted from the company.

Tax-saving strategies

Expenditure incurred before the company year-end might reduce the current year's tax liability instead of next year's.

Interest and tax payments

HMRC charge interest on underpayments of tax, and pays interest (repayment supplement) on overpayments.

Companies Act

The Companies Act comprises approximately 1,300 sections.

Companies House - forms you need to know about

There are over 100 company-related forms prescribed. We list below these and include a link to all the forms which can be downloaded direct from Companies House.

The law and directors' responsibilities

Who is a director and what are their legal responsibilities?

Statutory records

It is essential that you keep your company's statutory records up-to-date. Do not underestimate the importance of these records - they are definitive proof of the company's legal existence and its members.

The company secretary

The position of company secretary in a private company is now optional. Thus a company can operate with a sole director.

Getting the company struck off

A private company (not subject to insolvency proceedings) can apply to the Registrar of Companies to be struck off the register and dissolved.