What is a Service Address?

• What is a Limited Company
• 10 step process for setting up a Limited Company

When you set up a limited company, you'll enjoy many advantages you don't get as a sole trader. Not only is it a tax-efficient way to run your business, it's also a great way to limit your personal liability and increase your credibility with customers. Additionally, it could open new avenues of work that wouldn't be open to you if you were operating as a sole trader, especially some contractor roles.

One of the disadvantages of running a limited company is that it involves a lot of paperwork, but with the help of this guide, we'll clear away the jargon and tell you exactly what you need.

If you're unsure about whether a limited company is right for you, check out our handy article comparing the differences between Limited companies and Sole Traders to see which business entity is right for you.

If you've got more important things to do than dealing with extra admin, you can always take advantage of one of our accountancy packages and we'll do all the forms and applications for you.

There is no clear cut time as to when you should start working through your own limited company. With other routes available-such as operating as a sole trader, or working through an umbrella company-it is always worth weighing up what is best for you and your circumstances.

With that being said, if you plan to work as an independent contractor for the foreseeable future, opening your own limited company at the early stages can maximise your opportunities for reaping the benefits of having your own company straight away.

Modern businesses can run almost entirely online, and thrive through the internet business culture.

From e-commerce to freelance programming, it's amazing how many small businesses can thrive without booking a commercial location as a headquarters. It's even possible to have a completely remote team, none of whom have ever seen each other in person.

However, there are some things that you can't do with online platforms and email alone.

Here at Forma, we know know that some aspects of business require a physical location, and many of them are not well-suited to using a home for that purpose. Even if your home is your official HQ, you'd likely rather not share that information with customers or business partners.

The simple addition of a virtual office to your business resources can provide everything you might need from a commercial office-without the hassle or expense of actually relocating your business or renting commercial real estate.

If you change your company's registered office address, you must inform Companies House. You can do so online, or by sending form AD01 to Companies House by post. Once the change is approved, Companies House will then notify HMRC.

Do note that the change will only be official once Companies House has registered it. Additionally, your new registered office address must be in the same part of the UK that the company was incorporated.

• What is a Virtual Office
• Benefits of a VIrtual Office
• How to choose the right virtual office

As its name suggests, a registered office address is the address which your company is registered at Companies House. It is shown on the public record, and official mail is sent to this address. When you purchase Forma's virtual office package, you can use our Central London business address as your registered company address.

A trading address is where your customers, banks or suppliers send you correspondence. It can differ from the company's registered address, and doesn't have to be public information.

Mail forwarding is a convenient way to use a registered business address to receive all your business mail, and to ensure you receive your mail on time.

The benefits of using a professional address are that it allows you to keep your home address off of public records (like Companies House) and you can put it on your website, business cards and use online directories, like Google My Business to get found in local search results.

When you essentially use the office of someone else without being a tenant then issues can arise with getting your mail promptly.

Some locations will only let you collect your mail, while others will charge a variety of additional charges for either sending on your mail, notifying you or for even checking to see if you've received mail when you ask.

There is no clear cut time as to when you should start working through your own limited company. With other routes available-such as operating as a sole trader, or working through an umbrella company-it is always worth weighing up what is best for you and your circumstances.

With that being said, if you plan to work as an independent contractor for the foreseeable future, opening your own limited company at the early stages can maximise your opportunities for reaping the benefits of having your own company straight away.

If you change your company's registered office address, you must inform Companies House. You can do so online, or by sending form AD01 to Companies House by post. Once the change is approved, Companies House will then notify HMRC.

Do note that the change will only be official once Companies House has registered it. Additionally, your new registered office address must be in the same part of the UK that the company was incorporated.

The advantages to setting up a limited company are:

• Owners aren't fully liable
• Tax savings
• Using a limited company structure lends credibility to your business
  

There are a couple of ways to go about registering a limited company:

• Register directly through Companies House
• Go through a third party: An accountant or company formation service can help you process your application, significantly lessening your admin burden. Beyond the application, a good third-party service can also provide accounting advice, help you fulfil your filing obligations and assist with other admin tasks.
  

We've included further details in our guide on setting up a limited company.

What are the advantages of a private limited company?

In the UK, the majority of self-employed people operate as sole traders. While there are many advantages to being a sole trader, you could take home more money and give your business a professional edge by setting up as a limited company.

In this article, we'll look at the advantages of operating as a private limited company to see how it could benefit you. If you're interested in seeing whether a limited company could be a good option for your business, check out our Business Structure guide. If you're already operating as a sole trader, making the jump to a limited company is more straight forward than you think.

Advantage 1 ‚- You pay less tax and National Insurance Contributions

Who can turn their nose up at the prospect of increased take-home pay? Well, that's the principle benefit of setting up a limited company and one of the main factors that drive people to switch from a sole trader.

As a director of a limited company, the way you pay tax is different from how you pay as a sole trader. As a sole trader, you'll pay 20% or more on everything you earn over the tax threshold. As a limited company, you typically pay yourself a small salary so you incur as little personal tax as possible. The majority of your income will come in the form of dividends that are taxed at a much smaller rate, meaning you're able to maximise your take-home pay.

As well as the tax benefits, paying the majority of your income through dividends means that you're able to pay less National Insurance Contributions (NICs) as these do not apply to dividend payments.

Example - Here's a quick comparison of the difference in take-home pay for a sole trader and a limited company.

1. Sole Trader
   Revenue: £40,000
   Expenses: £1000
   Tax at 20%: £5,300
   Class 2 NIC: £158.60
   Class 4 NIC: £2,655
   Take-home pay: £30,886.40
   
   
   
2. Limited Company
   Revenue: £40,000
   Expenses: £1000
   Corporation tax: £5741.04
   Dividend tax at 7.5%: 1,406.92
   Take-home pay: £ 31,852.04
   

As you can see, you save £965.64 as a limited company. What's not to like?

Let's start with one of the most important elements of a Virtual Office: location.

For a low cost, you can use a professional address for your companies house registration, website, business cards and Google My Business location.

A good, central address in a professional office can really provide an edge and make it look like you have a real office but in reality you'll be working from home (or the beach).

Google My Business is a great way to boost your website SEO and get your business found in search results so you'll want to factor this into what people see when they search for your business.

Today, the Google My Business "card" features in search results in 93% of searches today.

When you Google a business name, you've probably become accustomed to seeing the company card on the right of the search result which provides an accessible way to find a phone number, website and address for the business (as well as products/ services and offers).

One critical thing users can see with your business address is the exterior of your "office".

Here's an example of how Mail Boxes Etc. looks at it's Covent Garden location:

If anyone searches for you on and you've set up a Google My Business profile then they'll see your Mail Boxes Etc Professional Office.

Other providers offer "Premium" central London business addresses but in reality the exterior is... awful.

Here's the exterior of one particularly popular cheap London address.

That literally pops up for anyone searching for businesses registered at that location.

It's important to find a good price point for a professional address that represents your business but doesn't break the bank.

Here's how our address looks for only £25 a month:

At the end of the day, we're proud of our location, and we want you to be proud of yours too.

Renting permanent physical office space is an expense many self-employed entrepreneurs simply cannot justify.

In fact, as Forbes recently observed, some of the biggest challenges of being a solopreneur are a direct result of this lack of personal space. And yet, overcoming these challenges is more straightforward than you might think.

In nearly every case, a virtual office will meet all of your needs at a fraction of the expense.

Let's look at those needs in detail so we can tick them off the list.

The drawbacks to setting up a limited company include:

• There are additional filing and reporting requirements to adhere to.
• Reduced privacy
  

If you're looking to the future with the hopes of beginning a journey running your own startup, chances are you're feeling some mixture of excitement, trepidation, and uncertainty when it comes to the finer details of your plan.

Starting your own business is an immensely fulfilling process and an excellent means to flex your creative muscles, but there's a lot of humdrum of business behind the process of turning a vision into a dream.

One of the most important (and one of the earliest) decisions in this process will centre around your business's formation. You'll have to select which type of business structure best suits your goals for the future.

While the choice may sound easy, you'll be well-served by giving the decision ample consideration. The business structure you select will have measurable implications on the way you make money and do business. It'll impact:

• How much tax you pay
• Your degree of personal liability should the business fail
• How much administrative work is involved in the business (both before it comes to fruition and over the course of its life)
• Your ability to finance and fund your efforts

If you make the wrong selection when it comes time to choose a business structure, you could be faced with a myriad of complications in the future.

Paying professionals for guidance and advice once things go wrong is costly and, for many, an embarrassing affair-performing research well in advance will ensure you're making the best choice for your company and that you can avoid losing out on money or pride later on.