Why You Need A Business Entity
What constitutes a business entity? A business is defined as the person or company that carries on the trade, manufacture, and sale of goods or provide services to make profit. If you are planning to conduct your own small business then you need to be registered with HM Revenue & Customs UK as soon as possible for tax purposes. This is done by registering with your local county court which will issue a "tax certificate number". This number needs to be entered onto all your invoices / bills etc so that HMRC can match these up in their database. The idea behind this is that they can identify who's paying what and who should get what back in return when due.
There are three main options for doing this in order to register with HMRC:
Option 1 - Use a Company Formation Service Provider. This is where you pay an "introduction fee" (usually between £300 and £500) and they then go out and register your company with the local county court so that you can apply for a Business Registration Certificate (BRN) online. Once registered it allows you to carry out all the tax administration functions on behalf of the company on your behalf. Option 2 - Use a self-employed individual accountants. This is where you pay your accountants to go and register your company with the local county court so that you can apply for a Business Registration Certificate (BRN) online. Once registered it allows you to carry out all the tax administration functions on behalf of the company on your behalf. Option 3 - Use a company formation service provider. This is where you pay an "introduction fee" (usually between £300 and £500) and then apply for a Business Registration Certificate (BRN) online through Business Link online. This makes things much easier as you can do it all online but requires some paperwork to be sent in at the same time. It also gives you access to accountants, business advisers and support services throughout the process.
You may also want to consider the following services:
Option 1 - Use a Company Formation Service Provider with Accountancy Services. This is where you pay an "introduction fee" (usually between £300 and £500) and they then go out and register your company with the local county court so that you can apply for a Business Registration Certificate (BRN) online. However, before they do any work they need to open up a business bank account in the company name and once registered, as mentioned above, it allows you to carry out all the admin functions on behalf of the company on your behalf. Option 2 - Use a self-employed accountants with business website to ensure all your company's financial and tax information is up to date. This means that you can apply for filing of HMRC tax returns online, they are also able to advise you on any planning and tax issues that you may face in the future. This also means that you can use a fixed price service which will save you money in the long run. Option 3 - Use a company formation service provider with accountancy services. This is where you pay an "introduction fee" (usually between £300 and £500) and then apply for a Business Registration Certificate (BRN) online through Business Link online. They will then set up a business website for you which allows your customers to find out more about your company and the services that it offers. It is also a great way to keep all your financial and tax information up to date so that you can apply for filing of HMRC tax returns online. Once registered it allows you to carry out all the admin functions on behalf of your company on your behalf.
The main point of all this is that once you have gained a Business Registration Certificate (BRN) through one of the above methods then you are able to conduct business in much the same way as a limited company would. You need to understand that most banks will not lend you money unless you have a business bank account in the name of your limited company. This is due to the fact that they see it as a much better way of protecting their investment. Even if you don't plan on ever taking on debt, it can still be beneficial to set up a limited company as there are many benefits such as:
To get these benefits you need to be VAT registered and all VAT returns are filed using the Business Registration Certificate (BRN) number which allows HMRC to match all your financial information.
This is what we do at Business Structure Advice Ltd, and part of our service is filing all HMRC returns online through Sage Payroll or complete Accounts package. If you are looking for an accountant or company formation help then please contact our friendly team on 020 3404 0900 or visit our website at www.businessstructureadvice.co.uk to find out more. We specialise in advice on: Limited company > Business registration certificate (BRN) > Tax returns > Accounts package > Payroll services
Article by Matt Turner, Independent Financial Adviser – Business Structure Advice Ltd
Tags: business formation, business structure advice, company formation, limited company
Disclaimer: The information contained within this website is for general information purposes only and not to be construed as professional advice in relation to specific situations or circumstances. In other words, please don't do anything stupid. We are not liable for any loss or damage you may suffer and/or incur either directly or indirectly as a result of using this website. All information is accurate at the time of writing, however we reserve the right to make amendments and alterations where necessary, without prior notice. We also reserve the right to correct any inaccuracies in pricing that are unrelated to our administration of your account(s).
Expert in: Generally all aspects of Business Advice including but not limited to: Company Set Up & Management, Business Structuring, Tax Planning & Advice all things financial accounting, tax and VAT related, outsourcing advice and procuring social media management (such as Facebook pages / Google+ etc).
I have been providing financial advice and business advice for over 18 years now, during which time I have been trained as a Chartered Accountant (CA), qualified Private Client Practitioner (PCP) and tax efficient limited company director. I am also qualified to do Full Financial Planning for individuals and families.
The aim of this Website is to provide my clients with the best possible service. If you have any questions or feedback please do not hesitate to contact me on 07790512082 , or email: mturner@financeadvice.co.uk .
Disclaimer: The information contained within this website is for general information purposes only and not to be construed as professional advice in relation to specific situations or circumstances. In other words, please don't do anything stupid. We are not liable for any loss or damage you may suffer and/or incur either directly or indirectly as a result of using this website. All information is accurate at the time of writing, however we reserve the right to make amendments and alterations where necessary, without prior notice. We also reserve the right to correct any inaccuracies in pricing that are unrelated to our administration of your account(s).
Article by Matt Turner, Financial Adviser and Accountant - http://www.businessstructureadvice.co.
Conclusion
When you first create a company, you need to put everything in place, set it up and get the ball rolling. There just can't be too much of a gap between creating your company, or registering the trading name of your business, and you actually getting money coming into the business.
Remember that having your own business means that you're in control. You don't need anyone else's permission to start or run your own business and why would you want to? However, especially when starting out it's important not to let things get out of hand. It's all too easy to get carried away by deadlines and targets you set for yourself and forget about those who depend on you.