If you want to legally incorporate your business as a company in the UK, you’ve got to register as a limited company through Companies House. Here is a complete guide provided by company formation specialists 1st Formations
This process can often sound a bit daunting or complicated — and if you’re totally new to the world of UK companies, it’s not hard to see why. At first glance, it can be a lot to take in.
But the truth is that company formation doesn’t have to be scary or complicated. In fact, it’s actually pretty straightforward. All you need are the right tools and the right advice to make sure you get the job done right the first time.
This guide will walk you through the five simple steps you’ve got to follow to easily register a limited company in the UK.
Step 1: Choose a company structure
The first step to register a limited company is to decide what kind of structure you’d like.
When you set up a private limited company, you’ve got two structures to choose from: limited by shares or limited by guarantee.
A limited by shares company is definitely the most popular structure. It’s designed for individuals wanting to set up a commercial business designed to make a profit.
By contrast, a limited by guarantee company is designed for nonprofits and charities that do not distribute profits to shareholders.
If you’re setting up a traditional partnership like an accountancy or a law firm, you’d probably choose a limited liability partnership (LLP) instead.
Step 2: Choose a company name and address
Next, you’ve got to pick a company name. This is sort of the fun part — you get to use your imagination and create a name for your business that matches your dreams for success.
There are a couple of things you need to bear in mind, though. Your name needs to be 100% unique, and there are some Companies House rules around using words like “royal: or “trust”.
To make sure you don’t set your heart on a name that’s already in use, you can check online to make sure the name you want for your business is available.
You can check on company name availability here
After you’ve picked a company name, you need to choose a registered office address. This is your company’s “official” address, and it’s where HMRC and Companies House will send you important correspondence about your company.
You can choose any registered office address you want to, but there are a few rules. But your address needs to be in the part of the UK where you’ve registered your company — either England and Wales, Scotland, or Northern Ireland.
It’s important to note that this address will be publicly accessible online. That’s why a lot of business owners choose to take on a professional registered office address through a company formation agent such as 1st Formations that offers address services.
Step 3: Appoint officers and create your articles of association
When you register a limited by shares company, you’ll need at least one shareholder and one director. Shareholders are your company owners, and directors are appointed by shareholders to run the business on a day-to-day basis.
If you’re wanting to set up a business on your own, don’t stress. Your shareholder and director can be the exact same person. On the flip side, you can have multiple directors and members. It’s totally up to you.
You’ll also need to disclose all of the People with Significant Control (PSCs) of your company. These are usually just the shareholders or guarantors.
Next, you’ve got to create your articles of association.
Your company’s articles of association is its founding document. It spells out the rule book for your company and outlines the relationship between shareholders and directors, how shares are issued, and how decisions are made.
This can be pretty lengthy and complicated — which is why Companies House offers a standard template called the ‘model’ articles of association. This is suitable for most new companies, but you may need to tweak it here or there to make sure it matches the way you want your business run.
Step 4: Pick a share structure
You’ve also got to choose how many shares you’d like to issue when your company is formed. Each share represents a slice of ownership — and you’ve got to issue at least one share to every shareholder. There’s no limit to how many shares you can create.
For example, if you’re setting up the company on your own, you’d probably choose to issue one share. This would represent 100% ownership. If you were starting up the company with a friend, you might choose two shares representing 50% ownership.
Remember that you can always create more shares in the future. Just make sure that the share structure you’re choosing at the point of formation works for your company in the here and now.
Step 5: Send in your application form
Once you’ve entered all the necessary information, it can be sent to Companies House. The Registrar will then check to verify the information you’ve provided, process your application and approve.
You can send in your application via the post, directly through Companies House, or use a Companies House authorised company formation agent.
Generally speaking, the most affordable and quickest option is to go with a company formation agent. Using a company formation agent, you’ll benefit from an expert eye that can comb through your application before it’s submitted. This will ensure everything is 100% correct — preventing the odds your application will be delayed or rejected.
It’s also important to note that the application form you’ve got to complete to form a company is 35 pages long. If you choose a company formation agent, you’ll benefit from a quick online form that you can complete in a matter of minutes. From there, your company formation agent will spend their time doing all the boring bits.
It’s really that easy. But the truth is, this is just the tip of the iceberg. If you’re on the hunt for more tips on how to make registering and managing your limited company even easier, check out the 1st Formations blog. There, you’ll find loads of information on company formation, filing requirements, company taxes, and more.
Find out more about company formations or check your name availability and register a company in minutes via our partners, 1st Formations.