Set up a private limited company
Company formation has never been easy and takes a lot of hitches to complete the process. Company Registration UK leads from the front and makes this process a complete fairytale for you. The best part is “REGISTERING A BUSINESS IN 24 HRS
LTD OR LLP”. You can just call them, see them, and rest is done at your peace of mind.
For your basic knowledge, the following steps are involved in a company formation and all these are taken cared by Company Registration UK.
You can run your business as a private limited company. This means the company:
- is legally separate from the people who run it
- has separate finances from your personal ones
- can keep any profits it makes after paying tax
What you’ll need to do
To set up a private limited company you need to register with Companies House. This is known as ‘incorporation’.
- a suitable company name
- an address for the company
- at least one director
- details of the company’s shares- you need at least one shareholder
- to check what your SIC code is – this identifies what your company does
You’ll also need:
- shareholders to agree to create the company and the written rules (known as ‘memorandum and articles of association’)
- details of people with significant control over your company, for example, anyone with more than 25% shares or voting rights
Once you have these details, you can register your company.
Choose a company name
You must choose a name for your business if you’re setting up a private limited company.
There are different rules for sole traders and business partnerships.
You can trade using a different name for your registered name. This is known as a ‘business name’.
Business names must not:
- be the same as an existing trademark
- include ‘limited’, ‘Ltd’, ‘limited liability partnership, ‘LLP’, ‘public limited company’ or ‘plc’
- contain a ‘sensitive’ word or expression unless you get permission
You’ll need to register your name as a trademark if you want to stop people from trading under your business name.
You can’t use another company’s trademark as your business name.
Displaying your name
There are rules you must follow about displaying your company name.
When you don’t have to use ‘limited’ in your company name
You don’t have to use ‘limited’ in your name if your company is a registered charity or limited by guarantee and your articles of the association say your company:
- promotes or regulates commerce, art, science, education, religion, charity or any profession
- can’t pay its shareholders, for example through dividends
- requires each shareholder to contribute to company assets if it’s wound up during their membership, or within a year of them stopping being a shareholder
Your registered office address is where official communications will be sent, for example, letters from Companies House.
The address must be:
- a physical address in the UK
- in the same country your company is registered in, for example, a company registered in Scotland must have a registered office address in Scotland
You can use a PO Box. You must still include a physical address and postcode.
You can use your home address or the address of the person who will manage your Corporation Tax.
Your company address will be publicly available on the online register.
Appoint directors and a company secretary
Your company must have at least one director. Directors are legally responsible for running the company and making sure company accounts and reports are properly prepared.
A director must be 16 or over and not be disqualified from being a director.
Directors don’t have to live in the UK but companies must have a UK registered office address.
Directors’ names and addresses are publicly available from Companies House. You can stop your home address from appearing on the register if you or your family is at risk of abuse or harm because of your company’s work.
You don’t need a company secretary for a private limited company. Some companies use them to take on some of the director’s responsibilities.
The company secretary can be a director but can’t be:
- the company’s auditor
- an ‘undercharged bankrupt’ – unless they have permission from the court
The restrictions placed on a person when they’re made bankrupt usually end when they’re free from their debts (known as ‘discharged’). You can check if someone has been discharged using the Insolvency Register.
Even if you have a company secretary, the directors are legally responsible for the company.
Shares and shareholders
Most limited companies are ‘limited by shares’. This means they’re owned by shareholders, who have certain rights. For example, directors may need shareholders to vote and agree on changes to the company.
Work out your shares
A company limited by shares must have at least one shareholder, who can be a director. If you’re the only shareholder, you’ll own 100% of the company. There’s no maximum number of shareholders.
The price of an individual share can be any value. Shareholders will need to pay for their shares in full if the company has to shut down. You can choose a low share value (for example, £1) to limit the shareholders’ liability to a reasonable amount.
Issuing your initial shares
When you register a company you need to provide information about the shares (known as a ‘statement of capital’). This includes:
- the number of shares of each type the company has and their total value – known as the company’s ‘share capital’
- the names and addresses of all shareholders – known as ‘subscribers’ or ‘members’
Memorandum and articles of association
When you register your company you need:
- 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, directors and the company secretary
Memorandum of association
You can use the memorandum of association template. You can’t update the memorandum once the company has been registered.
Articles of association
You can use standard articles (known as ‘model articles’).
You can write your own articles but if you do, you can’t company online.
Community interest companies
You can’t use limited company model articles if you’re setting up a community interest company (CIC).
Register your company
You can register your company if you have everything you need to set up.
After you’ve registered
Once the company is registered you’ll get a ‘certificate of incorporation’. This confirms the company legally exists and shows the company number and date of formation.
You’ll also need to register for Corporation Tax within 3 months of starting to do business.
Register for Corporation Tax
After you’ve registered your company with Companies House, you’ll need to register it for Corporation Tax.
You’ll need to do this within 3 months of starting to do business. This includes buying, selling, advertising, renting a property and employing someone. You can check if you’re unsure what counts as starting to do business.
You may get a penalty if you register late.
How to register
You’ll need your company’s 10-digit Unique Taxpayer Reference (UTR) before you register for Corporation Tax online.
This is posted to your company address by HM Revenue and Customs (HMRC), usually within a few days of the company being registered with Companies House (incorporated).
Call the helpline if you didn’t get a UTR after registering your company.
The information you’ll need
When registering, you’ll need to tell HMRC:
- your company’s registration number
- the date you started to do business (your company’s first accounting period will start from this date)
- the date your annual accounts are made up to
What happens next
HMRC will tell you the deadline for paying Corporation Tax.
You’ll need to file a Company Tax Return, even if you make a loss or have no Corporation Tax to pay.