Limited companies

A limited company is one way to set up a business. It is legally separate from the people who own it.

A company director is responsible for running the business.

This guide is also available in Welsh (Cymraeg).

Private limited company responsibilities

You’ll have some legal, financial and other responsibilities when running a limited company.

A limited company has ‘limited liability’ which means owners are responsible for business debts only up to the value of their financial investment. This can give you protection if things go wrong.

Finances

There are rules to follow when taking money out of a limited company.

Limited companies can apply for business loans and investments.

Naming your business

You must follow the rules when choosing a name for your business.

Keeping records and accounts

Directors have responsibilities they must follow when running the company including:

Directors can hire other people to help (for example, an accountant) but they’re still legally responsible for the company’s records, accounts and performance.

Registering the limited company

You will need to register your company before you start trading. You’ll find out how to register during the set up process.

You do not need to start trading straight away - you can leave your company dormant.

Taxes

The company will need to pay taxes on its profits. People who take money out of the company may need to pay tax on the income.

The limited company will need to:

You can choose to register for VAT before it meets the requirements if you want to reclaim VAT on business expenses.

You may need to pay tax when taking money out of a limited company.

Find out about tax reliefs for limited companies to reduce your tax bill.

Rules for your type of business

You may have other responsibilities depending on what your business does.

Check if you need:

There are also rules you must follow if you:

Where you work

Check what your responsibilities are if you:

If you rent or buy a property, you may have to pay business rates. Small businesses can apply for a discount on business rates and some may pay nothing.

Check if you can claim office, property and equipment as expenses.

Taking on people to help

There are things you’ll need to do if you take on your own employees. You’ll have more responsibilities, including:

If you take on agency workers or freelancers you have some responsibilities, for example their health and safety.

Help and support

You can get help with setting up your business.