What Happens After You Register: The First Month of Running a Limited Company

When the paperwork’s done, Companies House has approved everything, and an officially registered limited company with you as a director has come into being. Exciting stuff, that’s proper steps taken to create something real. However, it’s important to note that registering the company is only the start.

The subsequent month of being a limited company is filled with day-to-day duties that many newly appointed directors fail to truly appreciate, but getting the best out of the first month gets you on track to avoid unnecessary stress later.

The Companies House Approval and What It Really Means

Soon after approval, Companies House sends out the certificate of incorporation along with the authentication codes and additional details you’ll need. This certificate is more than just a piece of paper placed in a fancy folder.

It’s your existence and the gatekeeper to business bank accounts, suppliers, and clients. The authentication code provides access to do filings and changes in your company details. It’s necessary sooner than you’d expect.

You’ll receive your company registration number as well. Be sure to have it handy as you’ll use it often. It needs to be on every single invoice and contract you issue, added to your website and printed on every form of business-related stationery. You’ll be surprised by how often it rears its head; however, it becomes second nature after a couple of weeks.

Setting Up HMRC Registration (Which Is Not Automatic)

Something you would think would be automatic but is not is HMRC registration, no one tells HMRC your company has been created; it operates at arm’s length from Companies House. This means that HMRC has to be separately notified of your company’s existence and that it will be doing business.

Any company that’s already trading will have no problem getting company formation out of the way, but any limited company must register with HMRC for Corporation Tax within three months of trading.

Corporation Tax applies to all profits made by a limited company regardless of whether they are high or low. Therefore, even companies who do not expect much in year one still must register. Corporation Tax is not based on the company as in estimated shareholders returns; instead, it’s merely to notify HMRC that your company exists and what it does.

You’ll also need to create a Government Gateway account if you do not have one and then register the limited company via that access portal for Corporation Tax.

HMRC usually send your Unique Taxpayer Reference about two weeks later; however, waiting longer is not uncommon with busier periods. This UTR is vital when it comes time for tax returns, so getting this established in the first month keeps everything else on track moving forward.

The Business Bank Account Responsibility

You’d think getting a business bank account would be easier than it is, but it’s definitely manageable. Most banks set up video appointments for verification these days, which can be booked up for a couple of weeks (or even longer) in advance.

They’ll want to see your certificate of incorporation, proof of your business address, director identity (usually passports), and some insight into what your business does (mainly for regulatory purposes).

Some banks are picky about what industries they’ll support (and whether or not it’s a new company without trading history), and directors who run their companies from home tend to get asked a bit more about where the business is actually going to be held, but all this is standard verification.

Therefore, even if a bank doesn’t approve you within a good time frame of booking an appointment, at least getting this ball rolling in that first month, even if approval takes longer is key.

Some directors use personal accounts in the interim for their first business transactions until everything is sorted (a recommended, albeit accountant frown upon suggestion) since keeping everything separate is better from the outset for accounting purposes.

Newer digital banks make approval processes easier since they just want to see the creation paperwork quickly, but this only helps if your business is intending to trade soon after formation.

Remembering Your New Director Obligations

Although being an appointed company director has obligations that come along with it, they’re relatively straightforward once you know what they are. Company records must be maintained, annual confirmation statements filed with Companies House and Corporation Tax returns need to be done annually and in all considerations, you must act in the best interests of the company at all times.

This is fairly straightforward since rules exist to ensure fairness and transparency. The most pressing aspect is maintaining records since inception! You need to keep on top of income versus expenses from day one—note that expenses are only allowable if you can prove them—plus maintain records of invoices sent out, receipts received, etc.

The more organized you are, even if you hire an accountant later on to do this for you, the better off you’ll be when your accountant later asks for information.

Many directors will invest in simple bookkeeping software within the first month even if their plan is to hand it all over to another professional later on.

Similarly, whether you’re paying yourself through salary, dividends or expense reimbursements, you need to know how this works so there’s no confusion come tax time later down the line.

Getting This Straight Early Helps You Stay Organized

Even if it’s unnecessary at this point, getting a sense of insurance coverage needs is key within the first month as they can differ based on what your company does.

Professional indemnity or public liability or even employer’s liability if you’re hiring, whatever it might be (legally required industries must get certain insurance before they can trade).

This often comes down to advice more than anything else, even if it’s recommended but not required insurance, since certain industries may require insurance and other companies are better off having certain coverages.

Getting quotes takes time since providers need detailed information about what the company does or plans on doing until the time that coverage starts, but this is an expense worth weighing considering what you’re developing.

Many directors make sure that they have insurance in place before they begin trading since it’s worth protecting what’s been developed already, and businesses won’t want to take risks if they’re going through all that effort from the start.

The Registered Office Effect

The registered office address must exist for official correspondence regardless of whether it’s from home or from a separate entity altogether.

It’s a public record with Companies House so if you don’t want privacy over your home address, the office must be an office, or you’ll need to set up an entity with another registered office address (since many companies provide those services).

A director may wish during this first month or any time after changes where they’re currently based as long as they file a simple form with Companies House where required.

Therefore, it’s best to have this setup nice and early so all relevant documents arrive at their destination.

While Your First Accounts Are Due Next Year

While your accounts won’t be due for another year from now, it’s good to know in advance what’s coming so you can set yourself up right from inception for what’s up ahead.

Limited companies file annual accounts with Companies House for transparency and Corporation Tax Returns due when annual profits are assessed by HMRC and a confirmation statement due annually just states that your information hasn’t changed and ensures accuracy across existing records.

These apply regardless of size or profit, but they’re easily set up organized in advance.

Many directors will spend this month creating simple systems ahead so when dates come in the future, people won’t panic since they’ve already prepared.

The first month of being a limited company is much busier than anticipated but it’s also quite exciting because you’re setting everything up properly.

You’re actually creating change with each little thing you do and giving yourself proper footing for success down the line by taking this all very seriously from day one.