Q: I am a freelance journalist selling to international newspapers. I know that I need to be self-employed but the overseas agencies are also looking for me to be incorporated. How do I go about setting myself up as a company?
Sep 29 2005
Answered by: Philip Wilkinson Ask a question
There are a number of sites dedicated to helping people start up their own business. It is important to determine what type of business you would want to be, a sole trader, partnership, limited company or a limited liability partnership. For guidance on which would suit your requirements better, visit www.businesslink4london.com or call 0845 6000 787.
If you have decide to set up as a sole trader you will need to register with the Inland Revenue as self-employed, as your National Insurance contributions will be smaller than if you work as an employee. You can contact them on 08459 154515 or go to www.hmrc.gov.uk/startingup. This employee status is valid so long you have set up the company as a sole trader. If the company is set up as a limited company then the person is employed by the company.
If you decide to set up as a limited company, you must first register your business at the Registrar of Companies (Companies House). You will need to send several documents and certificates to Companies House, including a Memorandum of Association, Articles of Association, Form 10 and Form 12. Go to www.companieshouse.gov.uk/forms/formsOnline.shtml to download the required forms.
Companies House charges a standard registration fee of £20. It also offers a premium same-day registration service for a fee of £50, as of 1 February 2005. The Memorandum and Articles of Association have to be obtained from law stationers or company formation agents - costing around £15. The cost of having Form 12 witnessed is around £10.
Most small businesses that opt for limited company status become private limited companies rather than public limited companies (PLCs). The main differences between them are that:
• PLCs can raise money by selling shares on the stockmarket - private limited companies cannot.
• PLCs must have share capital of at least £50,000.
• PLCs must have two shareholders, two directors and a qualified company secretary.
A private company limited by shares can convert into a PLC, but it will need to re-register in order to do this.
Companies House have a range of material available including a guide to company formation (go to www.companieshouse.gov.uk/about/gbhtml/gbf1.shtml and a company incorporation starter pack as well (go to www.companieshouse.gov.uk/forms/statFormsEW.shtml).
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