There are a number of functions that should be observed when you are running your own limited company. In this section we provide information on key elements such as a directors role, company accounting and confirmation statements.
We also cover some important information following the changes which arose to the Companies Act 2006, IR35, new Real Time Information (RTI) legislation regarding payroll reporting and some frequently used forms you will encounter. An understanding of all of these elements will help you manage your company effectively and ensure you operate in a legally compliant manner.
The Role & Responsibilities of a Director
One of the key considerations when running your own limited company is fulfilling the role of a director. Understanding your duties and responsibilities as a director is essential. There are a range of statutory obligations you must follow.
Following a change in the law concerning Company Secretaries in April 2008, it is no longer necessary to have a named company secretary.
If you still wish to appoint a company secretary however, Brookson provides a comprehensive company secretarial service covering all routine corporate administration requirements together with any changes that may be required, for example, changing your company name.
This service is provided using Jordans' Secretaries Limited, the UK's largest provider of business formation and company secretarial services. Companies House also provides guidance on company names.
Company Accounting For Limited Companies
Your company is legally obliged to keep company accounts. These financial accounts must be kept for at least six years and must be summarised in a compulsory format. These are known as your statutory accounts and must show a true and fair view of your company.
A copy of these statutory accounts must be submitted after your year-end to Companies House (no later than nine months after the end of the accounting period or twenty one months from the date of incorporation, whichever is the earlier).
Of course, there is also an obligation to submit corporation tax returns to HMRC and settle the corporation tax liabilities of your company. Corporation tax must be paid nine months after the end of the accounting period and the corporation tax return will require submitting twelve months after the end of the accounting period at the latest.
To run your company efficiently, effective management accounts are a vital tool. They should be accurate and readily available when you need to make any decisions regarding the running of your business. Ideally they should clearly outline your company liabilities and available income for salary, dividends and ongoing investment.
If you wish to cease trading and close your limited company there are certain procedures and regulations you should observe in producing your cessation of accounts. Brookson has a process to guide you through this, but you should make an informed decision when choosing to close your company.
If you would like to make your company dormant so it is still available at a future date or simply protects a name or some intellectual property, you need to produce a set of dormant company accounts. Brookson provides a dormancy service designed to provide you with information on your dormant status and how this is monitored at Companies House.
Confirmation statements for Limited Companies
One of your principle responsibilities as a director of your limited company is to submit a confirmation statement to Companies House within 14 days of the anniversary of its incorporation.
You should understand how and when a confirmation statement is to be filed. The confirmation statement discloses director’s details and company shareholding information as at the date of the statement.
If there have been any changes and the information is incorrect, then the confirmation statement will require amending. If there are no amendments, then confirmation of the information held at Companies House or confirming that the information is correctly held at Companies House - this is normally performed online on the Companies House website.
You are also obliged to maintain a register of PSCs-persons of significant control- this is a list of any person who holds directly or indirectly more than 25% of the shares/voting rights in the company. The register is filed with your confirmation statement and will then only require updating if there are any changes to the shareholders.
Changes to the Companies Act 2006 and further changes underway
Our Changes to the Companies Act 2006 guidance outlines the key changes implemented by Companies House on 1 October 2009 and how they affect your responsibilities as a director of a limited company.
Following The Small Business, Enterprise and Employment Act receiving Royal Assent, a number of measures are being introduced from October 2015 with the intention of reducing red tape and enhancing transparency.
The Government brought in IR35 legislation in April 2000. Its function is to eliminate the avoidance of tax and National Insurance Contributions (NICs) through the use of intermediaries in circumstances where an individual worker would, for tax and NIC purposes, be regarded as an employee of a client. There are potential implications for you, and your company, should you be operating inside IR35 and some straightforward points to consider ensuring you are operating outside IR35.
Download our FREE guide to IR35
Real Time Information (RTI) explained
Under new RTI legislation Real Time Information (RTI) employee pay and deductions should be automatically submitted to HMRC whenever a payment is made.
As an employee of your own limited company this legislation affects you. Brookson customers should be aware of the legislation for administrative reasons, but do not need to do anything further as Brookson’s systems are fully compliant with HMRC’s requirements.
Frequently used forms
Our guidance to frequently used forms will provide you with an overview of statutory documents detailing what needs to completed and when.