09 Mar 09.03.2018 Start-ups: Company Formation
09.03.2018 Start-ups: Company Formation
There is a lot of administration to be done in order to set up a business. It is important to choose the right type of business structure from the outset and comply with all the associated legal requirements of doing so. A private limited company limited by shares is the most common type of company where the members’ liability on a winding up is limited to the amount unpaid on shares held by them.
How is a private limited company formed?
- To register a private limited company, a company must have at least one shareholder and one director (this can be the same person).
- You may also have a company secretary who will be responsible for the filing obligations of the company.
A company is registered by filing the necessary documents and paying the required fee at Companies House. The company is brought into existence when the Registrar of Companies (Registrar) issues the certificate of incorporation.
The prospective owners of the company can either, register a new company with documents that are specifically tailored to their requirements (a tailor-made company), or buy a company that has already been incorporated but has not yet traded (a shelf company).
The following forms must be sent to Companies House to incorporate a company:
- Application to register a company on Form IN01 and the fee;
- Memorandum of Association; and
- Articles of Association (except where you adopt model articles in their entirety).
Form IN01 is used to complete the following details:
- the proposed name of the company;
- the part of the United Kingdom where the company will have its registered office (this cannot be subsequently changed);
- general details about the proposed company, including a statement of proposed officers, the director(s), and the secretary if it has one, and its intended registered office address; and
- a statement of capital and initial shareholdings
Name – choosing a name for your business requires serious consideration. The name must not already be in use. Also, consider that some words or symbols are not capable of being registered.
Address – every incorporated company is required to have an official registered address filed at Companies House.
Shareholders and Directors’ information – if you are registering a limited company you will need to provide Companies House with the address and occupation of all directors and shareholders.
After formation – Once you have successfully registered your company, you will receive a registration number and then be able to open a company bank account. Once you receive the documentation you or your company secretary will be responsible for filing information about the company’s accounts with Companies House and HMRC.