Limited Company Contractor: Being Boss

Many contractors start their own limited company to be their own boss, or it’s a nice bonus anyway. Being able to work your own hours, turn down the work you don’t want, plan your holidays around you and not your colleagues, not have anyone breathing down your neck and doing what you think is best all of the time…ah that’s the life isn’t it? The dream of the masses is yours.

But whilst you’re skipping through the meadows of freedom, don’t forget to stop once in a while and take care of your brand new responsibilities. The grass needs to be cut now and again after all.

As the director of a limited company, all your sparkly new status doesn’t come free. You have taken on a number of responsibilities and statutory obligations which you must keep on top of. Most of them come hand in hand with running the business such as doing everything you can to ensure its success. You probably want to do this anyway but it is actually a legal obligation as well.

You are also responsible for keeping the company’s accounts and ensuring that they are a true reflection of your company’s financials. Whether you employ an accountant or not, they always remain your legal responsibility, as well as keeping the relevant financial records. Failure to do this may lead to your disqualification as a director and therefore the dissolution of your company.

Along with the financial records, there are a number of records you are responsible for keeping about the company itself. All records must be kept at the registered office for the company for a minimum of six years from the end of the financial year that they relate to. Holding these records will help you complete the company annual return which you will need to send to Companies House every year within 28 days of the company’s incorporation anniversary if you wish to avoid the possible dissolution of your company, prosecution and disqualification as a director.

You will also need to ensure compliance with relevant legislations such as IR35 and employment law, as well as following relevant marketing rules and notifying the relevant authorities (usually Companies House and/or HMRC) of any changes.

There are many responsibilities for a limited company contractor but most will consider them worthwhile, if not a little enjoyable. The majority of all these obligations come naturally with running the business so the majority of contractors will not find themselves too snowed under with administration neither, leaving you to go back to enjoying the finer things of being your own boss.

By:Jane Hailstone

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