Incorporating a company is an incredibly exciting milestone in your life as a business owner. It indicates that you have been performing well. However, incorporating does come with additional responsibilities that you must fulfil to ensure you meet legal requirements and operate smoothly.

Do’s

Below are a number of tasks that you need to action upon incorporation. Many of these may have already been addressed during the incorporation process that we will have assisted you with.

1. Open a Business Bank Account

Keeping personal and business finances separate is essential for managing cash flow and preparing accurate financial statements. With a limited company, it is a legal requirement to open a separate business account – you are not your company!

2. Transfer payments to your Business Account

Now that your business account is set up, it’s important to inform any suppliers or service providers about your new account details. This may include updating your indemnity insurance, GDC subscriptions, or other recurring expenses.

3. Associate Agreements

If you are an associate that has incorporated you will need to notify the practice where you work and ensure your associate agreements are updated accordingly. Failing to do so may result in the income being considered personally yours, which means you would be liable for personal tax on it.

4. Maintain Accurate Records

You must continue to maintain your financial records to a high standard – this will not just make your accounts process faster, but will also enable us to provide you with detailed support for finance applications and tax saving opportunities. You’ll manage these records through Xero, and training will be provided through our Associates Club. Remember, you are required to retain all financial records for 7 years from the end of the financial year.

5. File Confirmation Statements, Annual Accounts and Corporation Tax

As a limited company you will now have to file additional information with Companies House and HMRC, the main points here are:

• Confirmation statements – we will reach out to you when this is due and file this on your behalf.
• Annual Accounts – as a limited company you are now required to produce and file annual accounts. These are due 9 months after the company’s financial year, for example, accounts for a company with a March year end are due at the end of December. This is one of the key differences with being a sole trader, which you are due to file on the 31st of January. Another point to note is that you are still required to file your self assessment for the usual period. As a limited company you are required to submit a corporate tax return. This will be based on the profit that the limited company generates and is due to be filed and paid 9 months after the year end. It is crucial to set funds aside for this.

Don’ts

1. Don’t Mix Personal and Business Finances

Now that you are trading via a limited company it is important to keep personal expenses separate. Any personal expenses that the business pays for will need to be paid back to the company or declared as a dividend. This can quickly result in a larger personal tax bill than expected or Section 455 Tax.

2. Don’t Miss Tax Deadlines

As mentioned above, there are new deadlines that you will need to provide information for. We will be in contact with you to confirm what we require from you, and it is important to provide this in a timely manner so that we can ensure the deadlines are met.

3. Don’t Forget to Update Company Details

If there are changes in your company’s registered address, directors, or shareholders, update us so that we can make the necessary notifications to Companies House.

Final Thoughts

Incorporating a company in the UK is an exciting venture, but compliance and strategic planning are key to long-term success. By following these do’s and don’ts, you can ensure your company remains legally compliant, financially healthy, and well-positioned for growth. If you have recently incorporated and have any questions or you are wondering whether you should incorporate, please get in touch.