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Formation
Compliance
So this is matters derived from company law, such as how many directors, corporate or not, whether a company secretary, modfications to model articles – really the realms of professionals who live and breathe these matters, but your usual formation “agents” typically automatically ensure you comply. Watch out for: directors’ quorum being affected by altered articles.
Planning
Types of shares, directors’ matters such as special voting rights, if corporate. Much of this has to do with how you view what may happen in the future and / or how long the life of the company is expected to be, for example a construction company’s subsidiary formed (to ringfence risk) to build a housing estate won’t be expected to have an infinite life. So what you might see as formed for a (special) purpose (you will hear of these referred to as “SPVs”.
Timing is important in so far as where you have an EXPECTED source of sales based on a contract of supply you are busy negotiating, you do not really want to form the company only to find it all comes to nothing and you have (a) incurred the costs involved in formation and (b) you now have the responsibility of a company not required; even if all you do is have it struck off, these are all time distractions a busy person can do without – and for which a professional will charge you professional rates to do it for you; all for the sake of getting the timing right and not being over enthusiastic. Typically a company can be formed by the end of tomorrow and even today if at a little extra cost. Assuming you have put all the requirements in place of course and have simply to hit “submit” AND you have not made any mistakes in there, such as finding your chosen name is already taken (watch out for N.I. companies appearing).
The list of caveats is endless, so be aware there will be much you do not know you do not know and this even applies to general practitioners in all spheres. However, using the usual specialist formation agents should offer protection against much. Their charges for tailor making changes are usually reasonable when you explain what you wish to achieve, and their modifications to the model articles will be based on specialised legal opinion (or should be).
Succession
Worthy of note on its own is the area we call “succession planning” which in its most obvious form (is it?) is where a company is handed on from father to son (mother to daughter etc etc). This is a very specialised area in its own right so just be aware of it if this is relevant for you.
Legal
- Negotiation and population of contracts of sales and purchases, being aware of “pre-incorporation” contracts. Check companies house for existence
- Take insurance policies, both required by law (motor and employer) and other risks mitigation (e.g. p.i.i and product liability etc) . Check START dates result in desirable renewal dates (so for NOT expiring weeks before the company year end (Accounting Period) where renewal can be required despite only a week or two’s cover is required.
- Professional review of contracts preferably before, but can be after signature. Awareness of whether third parties can view the absence of such reviews to be an absence of business control (competence), so sometimes one may not think review is necessary, but the presence of that process is the more important in risk mitigation. There seems to be a certain irony in a legal contract review being important in risk management not for the result of the review, but for having been carried out regardless.
Technical (“Tech”)
Creation of business infrastructure
- Domain registration
- DNS (independent)
- DNS Reputation
- Blacklist defence
- Server (independent of the above)
- Ransomeware defence (or notes of why not).
- SPF
- DNS Sec
- DKIM
- PGP etc
- SSL Certicates
- Emal server
- Email accounts – not personal ones like Hotmail
- Email distributions
- Web site
This tends to be used more for personal identity purposes, such as by Fintech banks. Consider a dedicated business profile. Likewise Facebook and others.
Telephone numbers / system
Do NOT use private and/or home numbers.
Banks
Consider use of “high street” or “Fintech” banks or indeed both. As regards Fintech the current experience is their reliability can be compromised because they make insufficient effort at the time of account opening in favour of ease of that process and then freeze a transaction while demanding documentary evidence for it. High Street banks tend to be more difficult to open but more reliable ongoing, subject to their later requests, but these do not involve freezing live transactions.
In view of the risk of a bank being unreliable it is wise to have more than one so that if one closes your account and sends you a cheque for the balance made payable to your company, you have somewhere to pay in this cheque.
Given you have two accounts, use one for larger and / or “formal” matters such as taxation, VAT, dividends, sales (low volume), payroll, rent and so on. Use the other for the “shrapnel” transactions; so these are relatively high volume low value, for example daily subsistence coffee, fuel purchases, small stationery and so on. Perhaps as a very rough rule of thumb this may be all amounts less than £5,000 unless “formal”.
AVOID using any of your personal accounts whether debit or credit. Do NOT engage in “re-imbursed expenses” which you may be accustomed to doing previously. Why? HMRC P.a.y.e. traps which are no problem until they are AND in any case require payroll operations when simply using a company card removes all of this red tape.
Clearly do not mix business and personal transactions between business and personal bank (and card) accounts. However, if in doubt use the company account because this can be simply allocated to (ceteris paribus) your director’s loan account, whereas a business payment paid personal leads you in to “re-imbursed expenses” as above. Keep it simplest.
More than two accounts? Sure, no problem. Make SURE you have the bookeeping sorted, preferably automatically using tech not people. Check for bookkeeping systems in the cloud that are offered free with one bank account or another, then check all your accounts can automatically feed this, including if that includes all or only some types of and level of account (such as “basic” versus “pro”). Some require their own proprietary system to be used for feeds and other offer nothing at all and must be manually exported and imported (which is easy enough as long as the cut off dates are always strictly checked).
Company Taxes
In likely order of ability to enact by passage of time. The issue in these is that while we desire to get everything done immediately so we can no longer have to give it further attention, these matters are forcibly delayed by HMRC’s procedures
- VAT – pre or at registration threshold
- CT41G HMRC form arrives (eventually) making possible the following:
- Payroll scheme if required.
- Gov Gateway to HMRC account (immediate access) – personal identity controls can be very difficult, despite on the surface appearing simple enough.
- Notify company “start of activity” date – this is intended to avoid doing more than ONE corporation tax return at the end of the first “year” of business.
- Apply for and activate Corporation tax in the gateway – delay as code is sent by post.
- Check the ARD (“year end”) date as companies house is as desired – keep in mind an extension can be done only ONCE every FIVE years while shortenings are not restricted.
- Make sure your S.A. matters are all also working. I question mixing these two.
The amateur (“employee type”) view of the timeline
Formation is £30 quid or even free (see next), no thought required or desired.
“Accountant” about £50 a month including free formation above and all taxes and obligations dealt with – I’ll pay when and what they tell me.
Bank is which ever comes up first on google and looks and is easy.
Running my company: I will do whatever the accountants tell me as that is what they are there for. I’m too busy to attend to red tape.
I will always check everything with my mates down the pub, they always know best based on what they or their other mates do.
And so there is nothing else I need be concerned about; no risks or anything. If anything goes wrong its not my responsibility, I’ll just blame the accountants who I am paying for this.
Author’s note: just to be clear, you need to know that in law you CANNOT transfer responsibiity to anyone else; you can delegate, but you cannot abrogate. The buck stops with you, regardless of who you are thinking you can point your finger at and how much you have paid.
I am not saying this is going to be easy.
I am saying it will be worth it.
“Foresight” this is known as “paying attention to all the details”… something which is sorely lacking in much of today’s business.