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UK LLC Start up advice please!

How to?

     
2:06 pm on Aug 2, 2005 (gmt 0)

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Hi,

I am hoping to start a UK LLC company. I have never opened a company let alone an LLC.

Do you guys have any idea how I go about starting one up?

costs? pitfalls? things to look out for?

Anything I might have missed out?

2:07 pm on Aug 2, 2005 (gmt 0)

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www.companieshouse.gov.uk

Information on registering a Limited Company (LTD) <- UK equiv of LLC

2:28 pm on Aug 2, 2005 (gmt 0)

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1. Buying a company off the shelf should cost 50-200. You need to update Companies House annually with a set of accounts and info on directors/change in ownership etc.

2. Prepare to get scr*wed on tax [webmasterworld.com] like [almost] nowhere else on earth.
(The published Corporation Tax figures etc don't tell half the story. Many small business owners pay 90% of what they earn in a variety of different taxes)

3. Get the advice of a good accountant.

6:00 pm on Aug 2, 2005 (gmt 0)

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HI guys, thanks for the replies so far...but...

Angelis - The UK now has the ability to register LLC's (we can also register Ltd companies here, but they are different)

I always thought that having a business had tax ADVANTAGES rather than disadvantages (rich dad/poor dad) is this incorrect?

6:19 pm on Aug 2, 2005 (gmt 0)

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There are tax advantages in that you can pay the lower Corporation Tax instead of Personal Income tax of 40% (less allowances). But, try taking dividends without a salary, the IR won't like it one bit.

Incorporation has the advantage of the Limited Liability bit i.e. when the business doesn't work out your creditors lose money, not you. Your creditors write off the amount as a bad debt, they don't make you homeless. And for the privelege of the Limited Liability protection you'll jump the hoops, pay CH their annual filing fee, pay an accountant (or auditor... depending on level of T/O), pay VAT at 17.5%, pay PAYE (euphemism for Income Tax) at 40%, pay both employer and employees' National Insurance Contributions - not a "tax" ;), not pay your spouse a salary [google.co.uk], and pay Corporation Tax on what little is left after the IR have finished with you. Any big purchases you make in the company name are likely to be subject to Stamp Duty (note, again, it's not called "tax") and when you sell them you'll likely pay CGT. When you die your kids will pay IHT on what's left.

True, some of these taxes are payable even in you aren't incorporated but this maybe a good time to assess offshore registrations. It may be too late in a year or two.

8:06 pm on Aug 2, 2005 (gmt 0)

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Geez...

Any recomendations on a good offshore coutry for a LLC?

9:26 am on Aug 3, 2005 (gmt 0)

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Talk to a good accountant before you do anything.

Depending on your turnover/profits etc. a limited company might be the cheapest solution in the long run.

10:51 am on Aug 3, 2005 (gmt 0)

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As Steve and I suggest... speak to a good accountant. However, I have a habit of doing a lot of independent research myself. I've got a great accountant but some of the best ideas that have saved me tax over the years came from me. Accountants, by nature, are not aggresive in saving you tax. They won't tell you how you can get the R&D sops for all the SEO work you're doing. They won't tell you the best ways you can transfer assets from intangible to tangible (important for your credit rating purposes. Dun & Bradstreet exclude intangibles in calculating your company worth). They won't tell you lots of things. It took me a long time in business before I realised that accountants and auditors are working for the IR though they're getting their salaries from me. Duh! I feel so stupid now :( They'll point out the odd tax saving but you really have to press them, push them, challenge them, inform them. Their #1 priority is covering their ass which often pulls them in a different direction to saving you tax.

Going LLC is cheaper than some options ... but not cheaper than going off-shore ;)

I wouldn't take casual advice about going off-shore. Invest in research, read the websites, signup to the fora, subscribe to the specialist magazines, and take your time deciding. If you pay someone for advice in this matter - pay cash, it's less traceable. Even if you're doing nothing illegal... don't leave traces.