Setting up a limited company – GUIDELINES

How do I set up a limited company? – how to get started

Setting up a limited company starts with careful preparation. The first step is to define the company’s business plan and decide on the structure of the company, including the roles and responsibilities of the owners. It is then necessary to draw up the incorporation documents and ensure that all legal requirements are met.

Registering with the authorities is a key step, including choosing a name for your business and choosing your business activities. It is also important to ensure that the necessary financing is in place and that the company’s financial and management practices support the business from the outset. And don’t forget the shareholders’ agreement between the shareholders.

Setting up a company – Business name or limited company?

Choosing the type of company is an important step in becoming an entrepreneur. A business name is a simpler option, while setting up a limited company offers more growth opportunities and a clear separation between personal and corporate responsibilities. In this blog, we will compare the advantages of both types of company and help you choose the one that best suits your needs.

Setting up a limited company – business idea and business plan

The business idea is the core of the company, which tells you what value the company creates and for whom. It differentiates the company from its competitors and responds to the needs of its target audience. A good business idea is clear and realistic.

A business plan (LTS) describes how the business idea will be put into practice. The business plan helps to define the company’s short and long-term objectives and the strategies to achieve them. It helps to outline what resources are needed and the timeframe within which the various measures need to be implemented. A well-designed business plan can be a decisive factor in obtaining finance.

What is a good business plan?

The structure of a business plan can vary, but it typically includes the following elements:

• Basic information about the company: name, founders, sector and type of business.
• Business idea and value creation: a description of what products or services the company offers and what their competitive advantage is.
• Market analysis: analysis of the target group, competitors and market situation.
• Marketing plan: how to reach customers and differentiate your business in the market.
• Organisation and management: the structure of the company, the key people and their responsibilities.
• Financial plan: budget, cash flow projections and an estimate of the capital needed.
• Risk analysis: potential business risks and contingency plans.

Setting up a limited company – taxation

WATCH VIDEO! Taxation of a limited company is a multi-stage process, with a lot to consider in terms of corporate tax, VAT and taxation of shareholders’ income. A limited company pays 20% corporation tax on its profits, and if its turnover exceeds €20,000 it must register for VAT.

There are a number of exemptions from VAT liability if the activity is carried out in sectors that are not subject to VAT. Salaries and dividends received by shareholders are taxed separately and YEL contributions are deductible, thus reducing taxable income. Tax planning ensures the financial equilibrium of the business and gives the entrepreneur peace of mind for the future.

Maintenance costs of a limited company – what to consider?

The costs of setting up a limited company are not the only costs that an entrepreneur should be prepared for. There are maintenance costs associated with the ongoing operation of the business, such as accounting and audit fees, compulsory and voluntary insurance and advance taxes. Cash flow can also be affected by renting premises, purchasing equipment and marketing costs. Careful financial planning helps to anticipate these costs and ensure the successful operation of the business.

Setting up a limited company – what are the accounting costs and what does it cost?

Accounting is a legal obligation for every limited company, but the cost can vary considerably between companies. Pricing is influenced by factors such as the size of your company, the sector in which you operate, the number of accounting transactions and the services you require from the accountancy firm.

In addition to basic services, the price of accounting can include, for example, payroll, tax returns and financial advice. It’s a good idea for entrepreneurs to shop around for accountancy firms to find out what their services include and how they support the growth of their business. Read more in our blog, Why a cheap accountancy firm can be really expensive.

If you’re wondering how to choose an accountancy firm, read below for more information on pricing and comparing offers.

Setting up a limited company – entrepreneur’s salary

Do you dream of a net income of €3000 per month, for example? Of course, setting up a limited company brings with it thoughts about salary. Find out how much the entrepreneur has to charge to make the dream salary possible. Our blog provides a clear formula to help you work out your gross salary, taxes and expenses – and what you’ll end up with. Get to grips with the numbers and plan your business to be profitable

An accountancy firm sets up a limited company for you

Setting up a limited company with Valjaa is easy and risk-free. Setting up a limited company can seem complicated, but with Valjaa’s turnkey service you can get started without the stress. We take care of all the steps involved in setting up a company, including drafting the documents, registration and tax returns. The support of Valjaa’s experts will ensure that you avoid pitfalls, save time and can focus on starting your business in peace. We take care of the details – you can focus on a successful start!