02 Feb 5.6 Million Businesses
Statistics released by the Department for Business, Energy, and Industrial Strategy (BEIS) have revealed that at the start of 2021 there were some 5.6 million private sector businesses in the UK. For B2B businesses, those which sell to other businesses, that’s a lot of potential customers.
Sadly that’s a decrease of 6.5% on the previous year; perhaps unsurprisingly given the Covid impact on business. And whilst the UK may or may not still be a nation of shopkeepers, as Napoleon is once supposed to have said, we’re certainly still a nation of small businesses. Just over four million private sector businesses have no employees, whilst 1.1 million have fewer than ten people working for them. At the other end of the scale 7,655 private sector businesses have more than 250 employees each, between them adding £2.1 trillion in turnover to the UK economy.
Whilst some of these private sector businesses will retain their current size and legal status, others will look to change their status as they evolve; perhaps adding to the some two million actively trading companies in the private sector. Setting up a limited company is not difficult but there are certain considerations which if ignored can impact the future of the organisation.
For a start, given the nature of the organisation, is a limited company the right way to go or would a limited liability partnership be more advantageous? Then there are considerations such as whether standard company articles of association would be sufficient for the company needs or whether a bespoke set of articles would better enable the company to set and meet its objectives. The share structure chosen can also make a difference.
Once the initial incorporation has been completed, limited companies need to ensure that they comply with statutory returns including the maintenance of company registers, filing the annual company confirmation statement, and filing annual accounting records on time. These requirements are in addition to any requirement to submit quarterly ‘making tax digital’ or VAT returns. And for those companies with employees, in addition to annual tax year end returns, monthly salary records and payment of tax and NI contributions also need to be submitted; although this requirement is no different from any other legal entity with employees.
If any of this seems too complex or onerous, it is worth considering that a well structured organisation can help directors, owners, and investors to best meet their aims and objectives. Elemental CoSec can provide assistance to companies from formation to day to day compliance, accounting and HR services. Contact us to see how our expertise can help your organisation.