Most frequently asked questions and answers
The most common type of company in the UK is a private company limited by shares. Most of our company formation packages, are for this type of company. However we do form the full range of UK limited companies. These include:
Private Company Limited By Shares – A separate legal entity from the business owner. Has one or more directors/owners who are issued with shares in the company. Established and run to make a profit with profits being distributed to the owners in the form of dividends. The most common form of limited company and the one most of our company formation packages will create.
Company Limited By Guarantee – A form of limited company similar to a company limited by shares, does not have shareholders, but instead, its members act as ‘guarantors’ who agree to contribute a set amount of money on the winding up of the Company. This form of limited company is often used for non-profit reasons and is a recommended structure for many sports clubs and community organisations.
Charity Company – The traditional route to forming a charity in the UK is to form a Company Limited by Guarantee (above) but to form it using memorandum and articles of association which meet the requirements set out by the Charity Commission. Once the company is formed it can then be registered with the Charity Commission to officially make it a company.
CIC – A Community Interest Company is actually a modified version of either a Private Company Limited by Shares or a Company Limited by Guarantee. Although a CIC can make a profit they are often formed for non-profit organisations which have a social aim.
Limited Liability Partnership – LLPs are often used by accountants and solicitors. They allow the individuals in the company to operate independently but to share some of the protection offered by being a limited company.
Public Limited Company – is quite simply a limited company which is allowed to offer shares for sale to the public. This means that it can derive extra funds where it needs them by selling more shares and diluting ownership. Before a public limited company can begin trading it must show that it has issued at least £50,000 worth of shares. Registration of a public limited company also requires a minimum of 2 directors but otherwise is carried out in much the same way as any other Company Formation.
Registering as a sole trader informs HMRC that you are going to be self employed and will be earning money through your own business. It does not register your business, or create a business; it just tells HMRC what you are doing so that they know how to tax you. As a sole trader you are trading as an individual and taking on all financial and legal liability yourself.
Doing a company formation sets up a company as a separate legal entity from yourself. By trading through the company you can benefit from ‘limited liability’ from financial and legal issues. It also means that multiple people can formally take joint ownership of the business by allocating shares in the company.
asically anyone can carry out a UK company formation and become a company director unless they have been specifically banned from doing so (usually as a result of bankruptcy or legal proceedings). There is an age limit to form a limited company. You have to be 16 years of age or older (Section 157 Companies Act 2006). Although in practical terms it is extremely difficult to do things like open a bank account for your company until you are 18.
You only need one person to form a limited company. According to Section 154 of the Companies Act 2006 – A company limited by shares requires at least one (human) director but there may be more and it is possible for a limited company to be director of another limited company, as long as there is at least one human being who is already a director.
There is no longer a requirement to have a company secretary (Section 270 The Companies Act 2006) but you may choose to do so if you wish.
The final requirement is that you have, or can provide, a UK address to register to company to (this is something we can help with)
Since Section 270 of the Companies Act 2006 came into force there is no legal requirement to have a company secretary but many limited companies still choose to have one. Anybody can act as the Company Secretary of a private limited company. A person may consent to act as both the Company Secretary and be a Director of the same limited company.
Company numbers can only be generated when Companies House are open. Their hours are 9 am, to 5 pm, Monday to Friday. If you order a company outside of these hours we will submit it first thing on the next working morning.
Assuming you place your order during normal business hours we will check over the details you have submitted to make sure there are no obvious issues (e.g. a sensitive word in the name). We then submit your company formation directly into the Companies House systems. From that point it typically takes 3 to 5 hours to get your company number back.
The memorandum and articles of association are legal documents that set out:
The Company Name
The Registered Office location and
The internal constitution of the company
You will probably be asked for this document when you open a bank account for your company. All our companies are incorporated using standard ‘general commercial company’ memorandum and articles. These are written in a way that is designed to enable your company to carry out any business activity and to minimise the administrative requirements on the company. Our company formation service includes the drafting of these essential company documents to ensure proper registration with Companies House.
The certificate of incorporation is the document issued to confirm that Companies House has incorporated your company name and states the date of incorporation and the company number.
Using our online company formation service means there is no paperwork to fill out and sign. Instead you fill out a few simple online forms and we do the rest. Alongside a UK registered office address for the company and a residential address for the company director(s) we need 3 bits of person information. They are:
Mother’s maiden name
Town of birth
If you are using our Registered Office Service we may ask for additional ID such as scanned copies of passports or driving licenses.
Yes, you can choose any name you like as long as it is not already registered, ‘same as’ or ‘too like’ an existing company name or likely to cause offence. Some words in company names are however restricted or forbidden, these are called ‘sensitive words’. Due to changes made in the Companies Act 2006 words added to company names that might once have been sufficient to differentiate them from an already registered name and thus make them registerable are no longer deemed as such. These include words like ‘services’ and ‘UK’. You can register a name which includes sensitive words as long as it is approved by the secretary of state. For more information on sensitive words and guidance on choosing a company name, please see the relevant pages on our site. Remember that you must include the word “limited” or the letters “Ltd” as part of your company name when carrying out a company formation.
To cover yourself fully, you should also check that your name, or part of your name has not been registered as a Trademark by somebody else.
By law there must be at least one shareholder who subscribes to take at least one share. If you wish to take an equal amount of shares with another member of the company then it is usual to take one share each. Authorised share capital has now been abolished by The Companies Act 2006, so allocation of shares is now carried out slightly differently. If you choose the amount of shares to be issued by the company then the following are examples of how to distribute the shares.
Mr Smith wants to own 100% of the issued shares in Company X Limited. Mr Smith would take 1 share or whatever the total number is issued (if 100 were issued, he will take 100)
Mr Smith and Miss Jones want to own 50% each of the issued shares of Company X Limited. Mr Smith will take 1 share, Miss Jones will take 1 share (if 100 shares were issued, they would have 50 each).
Mr Smith wants to own 80% and Miss Jones 20% of the issued shares of Company X Limited. Mr Smith will take 8 shares, Miss Jones will take 2 shares (if 100 shares were issued it would be 80 and 20 respectively).
If you require advice regarding the shareholding for your limited company please contact our sales team
The registered office must be an address in England and Wales, or Scotland where legal documents can be served on your company. This address is kept on the Companies House database and is available for anybody to inspect free of charge. This address must also be written on all your company correspondence such as letterheads and invoices. It is quite common to use a director or company secretary’s home address as the registered office address.
Riverton Online offers a Registered Office address service if you wish to keep your home details separate from your company details. There is a small annual fee for this service that includes forwarding up to 10 items of statutory and legal mail each year.
In an effort to protect director’s personal details, the Companies Act 2006 introduced a ‘service address’ for directors. Directors will now have a service address and their residential address. Only the service address will be made public. The residential address is viewable by public authorities and credit agencies, but no one else. This allows some protection for the director. It is possible to use the companies registered office address as the director’s service address.
- Faster, more accurate results with everything done on your behalf.
- Significant savings – a postal application costs around two thirds more.
- Secure passing of information.
If your incorporation complies with the Companies House company registration regulations your formation could be completed within six working hours, however, this depends on how quickly Companies House are able to process applications. A formation should take no longer than 48 working hours maximum to process.
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