Setting up a limited company
If, having factored in all costs, you decide to proceed with a limited company, you will need to take the following steps:
- First off, you will register (or incorporate) your business with Companies House, the registrar for UK businesses. This can be done, by yourself, online (for a nominal fee of around £15-75 plus VAT), or by a solicitor or accountant.
- You will need to register the company for corporation tax. If you fail to register with Companies House within three months of incorporating, you will have to pay a penalty charge.
- You’ll need to set up a special purpose vehicle in order to ‘buy’ existing or new stock. This is a company which is registered for the sole purpose of buying or letting property. Most lenders will only choose to deal with SPV’s, or ‘none trading companies’, because they are less risky than trading companies and easier to underwrite.
- You should set up a separate company bank account.
Once this is all done, you will start the process of transferring, or ‘selling’, existing property stock to your company.