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Tax, Accountancy and VAT

ACCA

Companies

It is very easy to register a company in the UK, and there are many organisations (including ourselves) who will arrange this for less than £100. The registration process takes no account of the applicant's knowledge of company law or the company taxation regime. As a result, there are many companies whose shareholders and directors are continuing to run businesses in various states of illegality.

It is important to understand the distinction between shareholders and directors. Shareholders are the owners of the business. The directors are appointed by the shareholders to run the business. Of course, in a small company, these may be the same people (or person).

A company may be set up for a new business, or for the transfer of an existing business into a company (a process known as incorporation). The latter is often done for tax reduction reasons (which can be very effective), but without planning for all the implications.

The following is a list of some of the points to be considered: Future articles on this site will address these issues. At present see the article on understanding dividends.
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