Have you decided to trade as a limited company limited by shares (most common)? Then you have 2 choices, you can hire a professional to incorporate the company for you or you can incorporate it yourself.
Just remember, a limited company is a separate legal entity from the owners of the business. It has its own finances and keeps the profits after paying corporation tax.
Incorporate a Ltd company
You can do it online, it takes a few minutes and it costs £12 (last time I checked!).
OK, so what do you need before you start?
1. Company name
You need to choose a name for your business. The name cannot be sensitive, offensive or the same as an existing name on the register. Check if the name you want is available http://wck2.companieshouse.gov.uk//wcframe?name=accessCompanyInfo
Every company must have a registered address which must be a physical address. Companies House will use the registered address to send you information.
3. Business activity
You need to choose your activity and SIC (Standard Industrial Classification) code.
4. Officers details (Director and Secretary)- at least one director (company secretary is optional) and you need:
- Full name
- Residential address
- Service address
- Country/State of residence
- Nationality, occupation, date of birth and any former names
5. Share capital and shareholders details
You need to decide how many shares, what type and the name and address of each initial shareholders. You can issue however many shares you want at any price you want. There must be at least one shareholder but there is no maximum number of shareholders.
I would suggest choosing a low share value to limit shareholders liability to a reasonable amount in case the company will shut down in which case the shareholders will have to pay that amount in full!
You also need to include information about what rights each type of share (known as ‘class’) gives the shareholder. This information is known as ‘prescribed particulars’ and must include: what share of dividends they get, whether they can exchange (‘redeem’) their shares for money, whether they can vote on certain company matters, how many votes they get.
6. Memorandum and articles of association
- a ‘memorandum of association’ – a legal statement signed by all initial shareholders agreeing to form the company.
- ‘articles of association’ – written rules about running the company agreed by the shareholders.
I suggest using the standard articles on incorporation. You can always change it later.
If you have all the details click on the link and register https://www.gov.uk/limited-company-formation/memorandum-and-articles-of-associationYou pay £12 by debit card, credit card or PayPal. It’s generally a quick process and the company is normally registered within 24 hours. Companies House will send you an email to notify you once the company is incorporated.
I believe you can also register by post but it tends to be much slower so I recommend online.
And don’t worry, it is pretty straight forward. Once you are registered you can make any changes you like (mostly online as well).
After you incorporate the company
You will receive a letter from Companies House at the companies registered address with the authentication code for your company! Do not lose it! You will need the code for any changes you might want to make and for filing of confirmation statements, accounts etc.
Don’t worry, if you have misplaced it, you can always request to be resent! Companies House will send it by post at the companies registered address.
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