Setting Up Your New Company
Many people believe that setting up a company is difficult. The truth is it really needn’t be. It doesn’t require an army of lawyers. It can even be done in a single day. In fact you may not even need to set up a company at all. If your needs are simple, you can just operate as a Sole Trader without the need for any formal registration (though you should register as self-employed with the government).
Limited companies are more complex. In return for the legal privileges they receive from the government, they are required to operate with greater public transparency. Achieving that comes partly through registration and reporting requirements.
Company NamesBefore registering your new company, you’ll need to come up with a name. There are certain restrictions on the names that a limited company can have, so you should read the “Company Names” booklet from Companies House to familiarise yourself with these. You might also want to examine the trademark register to make sure that your name isn’t too similar to someone else’s registered trademark. Once you have a name that you’re happy with, you’ll need to check that no one else already has it.
Registering a New CompanyNew limited companies are created by registering with Companies House, the central repository for business information in the UK. You’ll need at least two company officers, a director and a company secretary, who cannot be the same person. To register a new company, you need to submit a number of legal documents, described below:
- Form 10 – In this document, you must provide details of what the company’s registered address will be, as well providing names, addresses and background information about any directors of the company and the company secretary.
- Form 12 – this document simply states that you are in compliance with all the laws relating to incorporated company formation. It has to be signed in the presence of a witness with legal standing, such as a notary public.
- Memorandum of Association – this describes what the goal of the company will be or, in legal jargon, “its objects”. This can be something vague like operating as a general commercial venture.
- Articles of Association – these describe how control and responsibility is divided up between the company’s officers and its shareholders.
The owners of some companies operating from home are made uncomfortable by the fact that their home address (which they usually provide as the company’s registered address) is available in the public domain. Some company formation agents offer a way around this problem by allowing you to use their address as your company has registered address and forwarding any relevant mail they receive to you. Of course, you will have to pay extra for this service.
Once you have all your documents, you simply submit them to Companies House and pay the registration fee. The whole process usually only takes a few days and you can opt to pay a higher fee in return for expedited same-day processing.
Whether you do it all yourself, or use the services of a company formation agent, you’ll find that setting up a company is very easy these days. If only making profits was as simple! But you’ll have time to worry about that later.