
Fortunately, a limited company is not hard to set
up. It only takes a few basic steps, and they're not difficult -
getting freelance work is a lot harder than this for the average
contractor.
The primary forms you'll need to fill out are Form 10, which
identifies your limited company and its initial directors and
officers (frequently just the freelance contractor himself plus one
other), and Form 12 - which declares your intent to file the
company. Both of these are available directly from Companies
House.
Once these two forms are filled out, your limited company will
need a Memorandum and Articles of Association. While there are
standard forms of these on record which may be adopted with little
effort, the average freelance contractor would likely find the
conditions onerous - and should generally instruct a solicitor to
prepare something more in line with their needs.
Once all these documents are prepared, they need only be filed
with the Companies House and the fees paid (at the time of writing
these are £20 or £50 for same day registrations). The contractor
may continue to freelance in the meantime, while the limited
company is registered and a certificate issued.
After about ten days, you will receive your certificate, which
will then enable you to obtain a business bank account in the name
of your new limited company. As a freelance contractor, you may or
may not provide services covered under VAT; if so, you will want to
register your limited company for VAT with HMRC.
While the process can seem daunting at first, forming a limited
company takes only a small amount of trouble and expense... even
when one considers the cost of a solicitor to prepare the Articles
of Association. The credibility it lends to a contractor - who is
no longer just freelance, but owning and running his own business -
is essentially priceless.
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Image: Acorn
by joshme17