To legally register a company in the UK you need to make an application – IN01 Application to register a company – to Companies House.
Companies House is an executive agency of the Department for Business Innovation and Skills (BIS) and one its main functions is to incorporate companies.
If your application is successful Companies House then formally records the name of your company and gives you sole right to that particular company name.
The following types of company can be formed using an IN01 form:
- Private company limited by shares
- Private company limited by guarantee
- Public company limited by shares and
- Private unlimited company with or without share capital.
You can find out more about the characteristics of each of these here.
Before you go ahead with your company formation however it makes sense to spend some time choosing the right name for your new company.
A good name can attract attention and make that much needed connection with your potential customers therefore giving you the opportunity to stand out from the crowd and most importantly from your competitors.
The Different Ways to Register a Company in the UK
1. Do it yourself: It is possible to form a company yourself online with Companies House directly.
2. Get help from your accountant: Accountants regularly deal with company formations as part of their work and this may be an easy and convenient option particularly if you get on well with your accountant. It is potentially a more expensive option than doing it yourself though.
3. Use an online company formation agent: This is by far the most popular method of setting up a limited company. Formation agents, such as Lightwork Business, use their own software that works directly with Companies House systems and provide helpful guidance on how to register a company to enable you to complete and send your application electronically.
A key advantage of using a formation agent is the advice they can give you on the right structure for your business and the compiling of the necessary documents for your company application.
The Registration Process
As you progress through the application process there will be a number of decisions which you will need to make:
- Pick a registered office
All companies in the UK must have a registered office address and it must be a physical location in the UK. It can be your business address but it does not have to be. It could be the address of your accountant, lawyer or any other address that you choose to be suitable to receive official letters and legal notices.
There are certain documents that need to be available for public inspection on request at the registered office address – for example the statutory books with registers of members and officers.
- Choose the directors
The Companies Act 2006 requires that a private company must have at least one director. Further if a company only has one director then that director must be an individual rather than a corporate entity (e.g. another company).
You may of course decide to have multiple directors and at the time of registration you are required to submit the names and addresses of all the people who are to be the directors of your new company.
- Choose a company secretary
Companies have a legal requirement to maintain their statutory records and file required documents every year – or risk financial penalty. In addition companies are expected to monitor changes in relevant legislation and take appropriate action as required.
These obligations typically fall to the company secretary and for a cost effective annual fee Lightwork Business can help you comply with all the statutory filing requirements therefore allowing you to stay focused on your business.
There is no legal requirement however for a private limited company to have a company secretary and you can use Companies House WebFiling service to submit the relevant information yourself.
- Decide on the company shareholdings
If you are forming a company with shareholdings – for example a private company limited by shares – the division of shares determines two very important factors:
- The amount of control each shareholder has over your company, and
- The percentage of profit received by each shareholder.
If a shareholder has more than 50% of the share capital they are said to have a ‘controlling interest’. If someone is issued with a share, this shareholder must be issued with a Share Certificate once they have paid the company the value of the share.
When there are two or more people involved in a business, it’s typical that a shareholders’ agreement, which defines the roles, responsibilities and relationships of a group of shareholders, is also created so that everyone knows where they stand.
What is the Cost of Registering Your Company?
The fee for registering through Companies House directly is currently £50 if the application is submitted electronically or £71 if the application is on paper. You can also fast track your application by paying a fee of £78 for electronic submission.
Company formation agents and accountants charge a variety of fees which can vary significantly depending on the services being provided together with the company formation.
Before You Go …
Read our next article to find out some of the most common reasons a limited company application would be rejected.
