Starting a construction company in the UK involves navigating through a series of legal and administrative steps to get the company registered with the Government. Here’s how you can set up your business as a limited company, which is often the preferred structure for its liability protections and tax benefits.
Step 1: Choose Your Company Name
- Uniqueness: Ensure your chosen name isn’t already in use by another company or trademark. You can check this through the name checking tools throughout our website.
- Endings: Your company name must end with ‘Limited’ or ‘Ltd’.
Step 2: Determine the Company Structure
- Shareholders: Decide who will own shares in the company. The shareholders are the most important people in a company as they own the business (not the Directors). You must have at least one shareholder to form a limited company.
- Directors: You must appoint at least one director (aged 16 or over). Companies House will need their details.
- Company Secretary: This role is optional since the Companies Act 2006. If appointed, they must be at least 16 years old. If you are unsure, you should not appoint one, A Company secretary can always be added at a later date.
Step 3: Prepare Your Company Documents
- Memorandum of Association: This document states the subscribers’ agreement to form the company and take at least one share each. The subscribers are the people who will be shareholders in your business. Using our service we prepare this electronically on your behalf and submit this to Companies House on your behalf.
- Articles of Association: Defines how your company will run, including rules about shares, directors’ powers and meetings.
Most companies use the “model articles” described in the Companies Act. Using our service we will prepare this document for you and send this to Companies House.
Step 4: Register Your Company
- Online Registration: The most straightforward method is by using our Company Formation Service or the more complex Companies House online service.
- Documents: Submit the Memorandum and Articles of Association.
- Information: Provide details like company name, registered office address, SIC code (Standard Industrial Classification for construction), director(s) details, PSC (Person with Significant Control) details, and shareholder information.
- Fee: There’s a government fee for registration, currently £50 for an online application.
- Post: Alternatively, you can send the documents by post, but this takes longer.
Step 5: Get Your Company Number and Certificate
- Upon successful registration, Companies House will issue:
- Company Number: A unique identifier for your business.
- Certificate of Incorporation: This is your legal proof of being a limited company. It is the birth certificate of your company.
Step 6: Registering for Corporation Tax
- HMRC: You do not need to do anything to register your company for Corporation Tax with HM Revenue & Customs (HMRC). HMRC obtain your registration details from Companies House and will send an innocuous looking letter around 2-3 weeks after your company is registered. This is actually a notice to file a CT600 corporation tax return.
When you register with us we provide full guidance on this.
Step 7: Set Up PAYE if Employing Staff
If your company will employ staff, you must register for PAYE (Pay As You Earn). This handles income tax and National Insurance contributions for employees.
LaunchList® has detailed tutorials to help show you how to do this yourself, or you can request our help.
Step 8: Consider VAT Registration
- Turnover: If your expected turnover exceeds £90,000 per year, you must register for VAT. Otherwise, voluntary registration can be beneficial for reclaiming VAT on purchases.
- LaunchList® has detailed tutorials to help show you how to register for VAT yourself, or you can request our help.
Step 9: Comply with Industry Regulations
- CIS: For construction, you’ll likely need to register for the Construction Industry Scheme (CIS). This affects how you handle payments to subcontractors and from contractors.
- You can use LaunchList® for guidance on registering for CIS
Step 10: Business Insurance
- Public Liability: Essential for construction work to cover potential damage or injury.
- Employer’s Liability: If you have employees, this insurance is legally required.
Step 11: Regular Compliance
- Annual Confirmation Statement: File this annually to update company details with Companies House.
- Accounts: File annual accounts. Dormant companies have simpler requirements.
LaunchList® contains self-help tutorials to show you how to manage filing your confirmation statement.
You can reach out to us for extra support and for accountancy recommendations via the MYCW client dashboard.
Step 12: Registering a Domain Name and Obtaining an Email Address
In today’s digital age, an online presence is crucial for any business, including construction companies. After setting up your legal entity:
- Domain Name: Choose a domain name that reflects your business identity. It’s often beneficial to align it closely with your company name for brand consistency. Use our domain registration service
Protect your Company Domain Name
Use our domain name search tool to find available names for your business.
- Email Address: Once you have your domain, set up a professional email address. We have “no technical skills required” email setup to allow you to create email addresses like info@yourconstructioncompany.co.uk. This not only looks professional but also helps in keeping business communications separate from personal emails.
This step enhances your business’s credibility, facilitates better marketing, and improves customer communication, which are all vital in the construction industry where trust and professionalism play significant roles.
By following these steps, you’ll establish a legal foundation for your construction business. Remember, running a limited company also means adhering to ongoing legal obligations like annual returns, accounting, and tax filings.
LaunchList® can provide you essential guidance to ensure all formalities are met, setting your construction company up for success.
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