Things You Need To Know About Forming A Limited Company
When aiming to start a limited company, it's best to be particular about all the finer details, of which there are many. Having business partners, directors, and shareholders requires many separate agreements on paper that need to be filed correctly with all the correct channels.
From the company’s selection to the percentage each shareholder is entitled to, it must be put down on paper, overseen by a qualified attorney and accountant, and filed correctly.
In order to form a limited company, you will need to decide on a company name. Choosing a company name might be easy, but bear in mind that it needs to be unique and not closely affiliated to or sounding like the name of any other company. You can use an online name checker to check if your company name is available before registering the name with Company's House.
Be careful to choose a business name that is clear and easy to pronounce. It has to be free of profanity or too many unique characters. To use a name that contains any particular associations like 'accredited', you will need to contact the Department of Business, Energy and Industrial Strategy (BEIS) for permission.
The next step you will need to focus on is getting a registered address, a phone number and an email address to include in the registration of your business name. Although you can register online, you will still need the address to increase any of the information you are submitting by mail that there is an address for the Company’s House and HMRC can reach you. The requirement for this was made legal in 2009 as part of the Companies act.
When it comes to a limited company formation, much of the information you need to register can be done with Company’s House.
The memorandum of association states the intention of each shareholder, along with their names and the name of the company. As the company’s founder, you can add only your name to the forms during the initial application. You can decide on the shareholders after the registration process has gone through as a baseline for the company.
The articles of association are a more legally binding rule book that details the directors’ duties, how the board could remove them and how the shares can be distributed. Drafting the papers from scratch is not recommended because it requires solicitation. You can use the form provided by Company’s House that is both a standard and legally approved document.
Once you have registered your company name, the names of all the directors and shareholders, and would like to amend the documentation you submitted, you can submit an IN01 form. This form is confidential and does not reveal any of the companies’ information to the public. None of the personal data of the directors and shareholders will be made public, but the company’s name will be available.
Register for the correct limited company
There are three different types of limited companies to register for:
Limited shares - this is a company that intends to make a profit distributed between the directors and shareholders.
Limited by guarantee - mostly known as non-profit organisations where the guarantors absorb the liabilities of the company.
Limited liability partnership - this is when two or three partners have limited liability responsibility within the company.
The great thing about limited company formation is that you have many options when you initially start and when you want to amend any decisions that the founders may have made. There is still the upside of not having any financial responsibility when the company fails to be successful.
You can shut down the company and be financially unaffected. The best you can do when you decide to start a limited company is to sit down with an accountant and an attorney and look through all your options. The less you need to change, the better and the sooner you start, the sooner you can have your company up and running.