Setting up a limited company can be a complicated process. So, it is important that you consider all the various aspects of setting up your own company before you begin.
Our guide explains how you register your limited company, what types of limited company there are and how you should appoint officers of your limited company.
Registering as a limited company
Before your business can begin operating as a limited company, it has to be registered with the Registrar of Companies at Companies House. This process is called ‘incorporation’.
In order to register as a limited company in the UK, you (or the agent acting for you) will need to send the following documents to Companies House:
- Application form IN01 – this includes the company’s registered office, the names and addresses of its directors, type of articles, statement of capital and initial shareholdings
- Memorandum of association – this confirms the subscribers’ intention to form and become members of a company. I n the case of a company limited by shares, the memorandum will also provide evidence of the members’ agreement to take at least one share each in the company
- Articles of association – this shows how your company will be run. Every company formed under company law will have articles of association. The articles form a contract between the company and its members and they set out how the company makes decisions. Every company is required to have articles and they are legally binding on the company and all of its members
The company comes into existence only when the Registrar of Companies issues a certificate of incorporation.
What type of limited company do you want to be?
There are four main types of company:
- Private company limited by shares – the liability of each member is limited to the amount unpaid on shares by them
- Private company limited by guarantee – a company that does not have shares and its members are guarantors rather than shareholders. Members’ liability is limited to the amount they have agreed to contribute to the company’s assets if it is wound up
- Private unlimited company – relatively rare, these companies have no limit on the members’ liability
- Public limited company (plc) – a company that has share capital and limits the liability of each member to the amount unpaid on their shares. PLCs can raise money by selling shares on the stock market and must have a share capital of at least £50,000
Your company officers
When you set up a limited company you will have to decide which people are appointed to run it. You must have company directors (who have to prepare and deliver documents such as an annual return and accounts) and, if needed, a company secretary.
Private companies must have at least one director, one of whom must be an individual person (as opposed to another company). A private company is not required to have a company secretary but can choose to appoint one should they wish. Public limited companies must have at least two directors (one of whom must be an individual person) and a formally qualified company secretary.
Setting up a limited company
You can set up a limited company by completing the appropriate paperwork yourself. However, many companies employ the services of a specialist – an accountant, business specialist or tax advisor – to help them set up their limited company.
