Explore our comprehensive guide for security professionals on setting up a limited company. Discover the benefits and step-by-step instructions, and see how Whittaker & Co. can assist you.
For many security professionals, operating as a limited company offers a range of benefits and could be a smarter, more profitable choice over other structures. We have put together an easy-to-follow guide covering everything you need to know—from what a limited company is, to the steps for setting one up.
What is a Limited Company?
A limited company is an organisation that separates your personal finances from those of the business, protecting your assets, and limiting your liability. In the UK, there are two primary types of limited companies:
- Limited by Shares: This is the most common type, suited to profit-making companies. The company is legally separate from its shareholders, and the profits are taxed under corporation tax rather than personal income tax.
- Limited by Guarantee: Common in not-for-profits, profits in these companies are reinvested, and they operate with ‘guarantors’ instead of shareholders.
You’ll also need to decide between a Private Limited Company (Ltd) and a Public Limited Company (PLC). Most smaller or individual security firms opt for a Private Limited Company as it requires just one director, while PLCs must have at least two directors and their shares can be traded on the stock exchange.
Why Choose a Limited Company?
Operating as a limited company can offer substantial benefits for security professionals:
- Limited Liability: As a company director, your personal assets are separate from the company’s liabilities. This protects your personal finances from business-related debts.
- Tax Efficiency: Limited companies pay corporation tax, often resulting in tax savings compared to sole traders who are taxed at personal income rates. Additionally, you have flexibility with how profits are distributed, enabling you to take advantage of dividends, generally taxed at a lower rate.
- Professional Image and Brand Protection: A limited company enhances your credibility with clients, offering reassurance that you’re committed and regulated. Your company name is also protected, preventing competitors from using a similar name.
- Funding Opportunities: Limited companies often have greater access to finance. They can issue shares to new investors and are eligible for certain business loans.
While there are added responsibilities—such as more detailed accounting and regulatory requirements—many security professionals find the benefits of limited liability, tax efficiency, and professional image make a limited company the ideal choice.
Steps to Set Up a Limited Company
Setting up a limited company might seem complex, but we’ve outlined a simple process to help you get started:
- Choose a Company Name: Ensure it’s unique by checking existing names and trademarks. UK government websites offer free tools to verify availability.
- Appoint Directors and Company Secretary: A director is legally responsible for the company’s compliance and financial filings. You can also assign a company secretary to assist with administrative duties, although the final responsibility remains with the director.
- Identify Shareholders and Set Share Details: Even if you’re the sole shareholder, you’ll need to declare share details in your registration, including who owns the shares and their voting rights. If there are multiple shareholders, you’ll outline how profits and voting power are distributed.
- Document People with Significant Control (PSC): This includes individuals with substantial influence, typically those owning 25% or more of shares. All PSCs must be disclosed to Companies House.
- Prepare Company Documents: This includes the Memorandum and Articles of Association, legal documents that establish the company’s constitution. You can use standard templates or create your own tailored documents.
- Organise Your Accounting Systems: Establish systems for tracking financial and operational records. Many security professionals find it easier to engage an accountant to manage their bookkeeping, payroll, and tax returns.
- Register with Companies House: You’ll need a UK physical address and a SIC code that describes your business activities. The process is quick and can be completed online within 24 hours.
How Much Does It Cost?
There is a small registration fee payable to Companies House, with online registration being the faster and more economical choice. See the government website for the latest fees.
Legal Responsibilities of a Limited Company
As a limited company, you must keep up-to-date records and submit annual financial statements. This includes promptly notifying Companies House of any changes in directors, shareholders, or addresses. Staying on top of these legal responsibilities helps you maintain compliance and avoid fines.
Whittaker & Co. is here to assist security professionals in setting up and running limited companies smoothly. Our team understands the security industry and is ready to provide the right guidance on everything from tax strategy to regulatory compliance.
Get in Touch
We’re here to help answer any questions you may have and to support you in setting up your limited company with confidence. For further information and links to useful resources, see below. Don’t hesitate to contact us with any queries—you’ll have the expertise of Whittaker & Co’s team behind you every step of the way.
Company name availability checker – Find and update company information – GOV.UK
Set up a private limited company: Limited companies – GOV.UK
Register a private or public company (IN01) – GOV.UK
Running a limited company: your responsibilities: Company and accounting records – GOV.UK
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