Understanding Companies House
As a contractor, you’ll need to decide how to organise your business.
When you see your contracting business grow, you might be thinking about how to take it to the next level. If so, setting up a limited company is often the most obvious approach to things. You'll probably do a lot of research, searching 'limited company set up for contractors' and 'making your company limited' for information. When you do this, you'll see that Companies House plays a big role, but what is Companies House and what does it do?
At GoLimited, we're here to help. When you're first contracting through a limited company, you'll need to understand limited company formation for contractors, and this is where Companies House comes in. Whether you're setting up a limited company for contracting or expanding your contracting ventures, Companies House plays a key part in making everything official.
What is Companies House?
Companies House is the government department in the UK, and it's responsible for registering, forming and maintaining the records of companies, including limited companies for contractors. It makes sure that companies in the UK are compliant with the relevant laws and regulations, and it keeps the public informed about what a company is up to. Companies House is where you'll go to officially make your company limited when you set up a limited company for contracting, but it's also where you'll go for other business ventures. Companies House also ensures that companies comply with corporate governance and are transparent, providing a level of security and trust to the public, clients and potential business partners.
What Can You Do On Companies House?
Companies House is all online, making it extremely convenient to use. There's a lot you can do on Companies House as a limited company set up for contractors, ranging from registering your limited company, changing company details and closing things up when you decide to move onto something else. To put it simply, Companies House is the 'go to' for anyone with a business. On Companies House, you can:
Register Your Limited Company
Setting up a limited company is one of the main jobs of Companies House. For those who want to set up a contractor limited company, registering with Companies House is a key part of the process. You'll need to provide basic information - such as the company name, directors and company address - and submit everything to Companies House. This process can be done online and, once registered, your company will officially exist.
Close a Company
There's a lot of excitement that comes with making your company limited but, if you've decided that you no longer need your limited company for contractors, you can close it by filing with Companies House. This makes sure that your company is officially removed from the Companies House register, and you won't have to deal with ongoing filing, tax returns or legal responsibilities.
File Annual Confirmation Statements
Once your limited company for contracting is set up, you'll need to maintain ongoing compliance with Companies House, and working with them isn't a 'one time' task. This includes filing an annual confirmation statement for your business, which provides up-to-date information about your company and directors.
Change Company Details
There might come a time when you'll need to change your company details. Companies House also allows you to do this, including changing information regarding the registered office address or director information. Whether you're contracting through a limited company or expanding your company for other ventures, keeping your company details updated with Companies House ensures everything is in order.
The Role of Companies House in Setting Up a Limited Company
When you decide to make your company limited, one of the first things you need to do is register it with Companies House. They will verify your application, make sure that the name you've chosen isn't already being used by another business, and ensure you've provided all the required details. Unless this happens, you won't be able to operate as a limited company.
Setting up a limited company with Companies House has a whole host of benefits, including tax efficiency and limited liability, meaning that your personal assets are protected from business debts. You can set up a contractor limited company, knowing that you're protected should the business fail. Once approved, you'll receive a Certificate of Incorporation from Companies House, confirming that your company is officially registered.
Why Companies House is Important for Contractors?
For contractors, making your company limited is a big deal. Not only does a limited company for contractors offer legal protection and tax benefits, but it also ensures that your business is in compliance with the law.
Legal Compliance
Setting up your company with Companies House ensures that you're following the proper legal processes for running a business in the UK. As a contractor using a limited company for other ventures, maintaining compliance is essential for avoiding fines and penalties.
Tax Efficiency
By registering with Companies House and operating as a limited company, you can take advantage of tax-saving opportunities, such as paying yourself a combination of salary and dividends. This can help reduce your overall tax burden, saving you money.
Enhanced Credibility
People who use a contractor limited company for their business are often seen as more professional and trustworthy to others. Many clients prefer to work with a limited company because it offers more financial stability and legal structure. Being a limited company showcases your business as one that's professional, that you're taking things seriously.
Limited Liability
When you set up a limited company for contracting, you separate your personal and business finances. This means that if your company faces legal action or financial difficulties, your personal assets - such as your home or car - are protected. You and the business are considered as separate legal entities.
Increased Opportunities
Operating through a limited company can open the door to new contracts, clients and business opportunities that you may not have had access to before. Many clients prefer working with contractors who have a limited company, as it ensures better financial management and security. It's a way to set yourself apart from other businesses.
Companies House FAQs
What is Companies House and why is it important?
Companies House is the UK government agency responsible for registering and maintaining the records of companies. When you set up a limited company for contracting, Companies House registers your business, making it an official entity. It also provides ongoing oversight to ensure your company remains compliant with relevant regulations.
How do I register my limited company with Companies House?
To register a contractor limited company, you can set up your limited company online through the Companies House. During the process, you'll need to provide essential information, including the company name, address, director details and shareholders.
Can I close my limited company through Companies House?
Yes, if you decide to close your limited company for contracting, you can apply for dissolution through Companies House. This involves completing the necessary paperwork and ensuring that any outstanding taxes or debts are settled before closing. Your company will then be officially removed from the register.
Do I have to submit annual accounts to Companies House?
Yes, once your company is set up, you'll need to submit annual accounts to Companies House. This is a legal requirement for all companies in the UK. These accounts give an overview of your company's financial situation and must be filed within a set deadline each year.
What is the difference between Companies House and HMRC?
While Companies House registers and maintains records for businesses, HMRC is responsible for tax collection and administration. When you register a contractor limited company, you'll need to inform HMRC about your business activities for tax purposes. While Companies House focuses on company formation and regulatory compliance, HMRC deals with your tax obligations.
How long does it take to register a limited company with Companies House?
The registration process is quick, especially if you set up your limited company online. Online applications typically take 24 hours to process, and you'll receive your Certificate of Incorporation shortly after approval.
Do I need to update Companies House if my company details change?
Yes, it's important to keep your company records up to date with Companies House. If any of your company details change, you must inform Companies House within a set period. You can update these details online or by submitting the necessary forms.
Important:
- Please note: Any rates and thresholds mentioned in this article are correct at the time of publishing and may be subject to change.
- When choosing an accountant, look for one with proven experience and expertise in the contracting sector, particularly around areas like IR35, limited company tax matters and off-payroll working. Formal qualifications are important, but relevant hands-on knowledge matters just as much — especially in a complex and fast-changing landscape like this.
Setting up a limited company might be the first time that you're working with Companies House, but GoLimited is here to help. Whether you're setting up a limited company or changing company details, Companies House is the 'go to' department you'll need to be aware of.
