Setting up a ltd Company
Working on setting up a ltd company in UK
As it is a popular type of business in the UK, it’s fairly simple to set up a limited company. However, you should never take the process lightly since it includes quite a few crucial steps. From choosing a company name to its registration, here is a step-by-step guide to establishing your business.
Choosing a Company Name
When creating a suitable name for your business, aside from making it unique, make sure it is sensible. Avoid using confusing or ‘sensitive’ language without certain permissions and ensure that ‘Ltd’ or ‘Limited’ is included in the name. Once you have something in mind, check the register for similar existing businesses and any exceptions that could apply.
Setting up an Address
It goes without saying that your company address must be a physical location in the UK. Keep in mind that the office address should be in the same country the business is registered in. The government will make it public information and use it for any necessary communication.
Assigning the Directors
A director always takes legal responsibility of running the company, so it’s necessary to nominate at least one director. His name and address, even if he doesn’t live in the UK, will become public information. If needed, you can always go through additional legal steps to keep it private.
Shareholders own the company, so their information is also publicly available, unless you take action to protect their privacy. Keep in mind, they can become a part of the decision making, so be careful to allocate the shares accordingly. You will have to include the total share number and value, along with shareholder information, in the ‘statement of capital’. There, you should also describe the share types and rights, and provide the document in the process of registration.
Make sure to provide a signed document between all of the shareholders – a ‘memorandum of association’. Along with the agreement to form a company, shareholders should also agree on the rules about running it. You should state them in the ‘articles of association’, which can be custom or according to an existing template. If any shareholders have over 25% shares or significant control in decision making, you must also detail this information. Lastly, find out your SIC code, which is just necessary to identify the industry your business is associated with.
Ways to Register
Before setting up a ltd company, to recap, you should already have:
- a company name;
- a legal address for your office;
- an appointed director;
- documents that detail the shares and shareholder information;
- additional details, agreements and written rules of the company.
With that at hand, you have a few options for registration, such as online, by post or using third-party services. If you can handle the process on your own, take the online route. However, if you use any custom agreements, you will have to go with the postal or third-party services. In any case, remember to register for Corporation Tax in the three-month period upon receiving your ‘certificate of incorporation’.
In view of the legal, technical and practical difficulties involved in dealing with setting up a ltd company, it is highly advisable to seek the assistance of a business lawyer, at a very early stage, possibly before signing any document. Any mistakes, in the long run, might compromise your business and therefore create several damages. Moreover, there is not only a limited company to fit your needs. You should always select a legal structure of a business which is compatible with your target market.