Insights From the FMco Team

Companies and Incorporation

Companies and Incorporation

Our larger and more established clients are trading as limited companies, and in a sense we are hoping to steer the start-ups that we work with down this path by instilling good accounting practices from the beginning of their business.

Incorporating as a limited company brings its own range of benefits but also entails quite a bit more bureaucracy and transparency. In that sense, we often tell our new clients to test the market first as a sole trader - in a sense that is the sole trader’s purpose. It’s at the point when the client is beginning to deal with either employees, leases, or their own pensions that they will need to consider the benefits of incorporation. And when they are at that stage, we are more than happy to help them deal with what is, in truth, quite a complicated operation.

The move to a limited liability status requires precise planning because it can become very messy, and accounts need to be switched overnight. Not arranging their affairs in the most efficient way can lead to clients having greater tax liability, or mistakenly loading debt onto the company, or leading them to believe that they have more money than they really do. We have encountered these kind of problems on a number of occasions and we are keen to make sure our clients make that leap cleanly and smoothly.

Limited companies that are more established are likely to have their own accountants in house. In these cases, our aim is to ensure that everything is done with the greatest efficiency. We advise the client to use a proper software package and ensure that their processes are sound so there is no panic at year end, with work being done throughout the year. We also interact with the Companies Registration Office on their behalf as well as producing a set of accounts for their board to sign off on at year-end.

We can also assist in the sale of a business, and help with capital gains tax liabilities in the event that a limited company is being sold (which is one of the many benefits of incorporation).

There is something we call a “life-cycle” of our clients which relates to the age of our own company. Currently, we are dealing with many new businesses, as established companies that have been with FMCO for many years are moving towards retirement age, so we are extremely familiar with all the issues that companies of a variety of sizes will go through over their lifespan.

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