I am thinking of setting up my own limited company but I am looking for some questions to be answered first. The business will only be very small and will be run part-time as I already have a full-time job. We will be selling things via the Internet with a web-site we have had designed. The company will be run by me and a friend and as mentioned won't really be earning a great deal of money (initially anyway!) but we wanted to do everything proper and "above board". We didn't want to set-up a partnership because the pitfalls are a little scary and so we decided to create a limited company. What are the costs of setting up and running a LTD? I have seen "company formation" services on the Internet and in magazines for approx £60 - are these any good? I also understand that we would require a chartered accountant to arrange and submit accounts to companies house - how much should this be costing?/black] Profits will be under £10,000 per year so I believe this means we wouldn't have to pay corporation tax - 0% rate upto £10k is this true? Can we run the company without employees and salaries? There will be two people in the business me and my friend who will be shareholders so we thought about being able to just take money from the profits as dividends every month - without having to pay a salary/wage. Is this possible? Would we be liable to pay income tax at normal rates for dividends taken? My friend is at uni and I am a basic rate tax payer. If things went well and after say 6 months we decided to start paying ourselves a salary - would we have to comply with minimum wage legislation? How would this work if we did - we would only be paying ourselves, no other employees would be taken on. How would minimum wage be implemented since salaries aren't based on hourly rates? We wouldn't want to be paying ourselves much and it would probably be under the minimum wage if you take into account the amount of hours we will be working in the first year - could we simply claim to have only worked so many hours "paid" and the rest voluntary or is there no nedd to comply with minimum wage anyway when paying ourselves? Are we allowed to change the amount of salary we pay ourselves each month? i.e. could we make it performance related? How would we implement PAYE? If profits are kept below £10k there is a 0% rate of corp tax increasing to small company rate of 19% when profits excedd £10k. If it looked like we could earn £15,000 profit (by not taking a wage) could we then decide to pay ourselves salaries or bonuses in the last finiancial month up to the value of say £6,000 in order to take the profits back below £10,000? [black]I understand that dividends are classed as profits but salaries aren't and that we would obviously pay income tax on the salaries/bonus paid. But we could avoid paying corp tax by doing this so that we only paid tax ONCE not TWICE. If anyone could answer any are all of these questions it would be great - I would sleep better at night and be able to move onto the next stage in setting the business up! All these question (and more) have been driving me mad! At least we have got over the first hurdle - deciding what formation our company should be thanx to the replies from my last post. Thank You. Any other advice would be most welcome. Sometimes there is contasting views posted on this forum but I'm sure "the truth is out there". One person said our own salaries would need to comply with minimum wage yet another post suggested paying yourself £4k (or under) to avoid paying income tax - how could this be done without lying about the number of hours worked or doing voluntary work for your own business. Paying £4k or under wouldn't work for me anyway becuase I already earn from my full-time job, but it may be an option for my friend who is at uni. He could in effect run this business without paying an iota in tax. (It would have to be a very small time business that didn't make much profit though) If profits were under £10k and he received less than the tax free allowance in income. Our business is going to be small time so it may be a possibility. Hopefully when he finishes Uni next year we may decide to expand the business.