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Although setting up as a Limited Company is a fairly straight forward process, there are a large number of applications that are rejected each year. Last year, Companies House saw 8% of online applications and a huge 53% of paper applications, rejected. Often these are simple mistakes and ones that could be avoided if more care and attention was applied to the application.
Online applications are usually processed within 24 hours however paper submission typically take about 10 working days. If you are looking for an easy and quicker way to submit your application, completing the online version is a better place to start.
Setting up a limited company
There’s a small list of criteria that you will need prior to filling out the form, once you have this information, you are ready to go. Ensure that you have all the information before trying to start the form to avoid mistakes or missed sections.
Choose a company name
First things first, you need a name to go any further. But before you choose a company name, you will need to ensure that the name hasn’t been registered already.
You can do this by using the Companies House WebCheck service. Simply enter your chosen name to see if it has already been used. You will also need to check that the proposed name does not infringe an existing trade mark.
This address is where your business will be registered and will be where official paperwork will be sent. It must be a physical address in the UK and must be in the same country as your business is registered in. For example, a company registered in Scotland must have a registered office address in Scotland.
You can use a PO Box address however you must also include a physical address and postcode. This address will then be available on the online public record.
Every company must have at least one Director and these people are legally responsible for running the company, including preparing company accounts director must be over 16. Note, a director does not have to live in the UK but must have a UK registered UK address.
A private limited company does not have to appoint a Secretary but may wish to do so. They can take some of the responsibility from the Directors but the Directors are still legally responsible for the company.
Limited companies are owned by shareholders, who own shares in the company and have certain rights to vote. These are used to make changes within the company.
A limited company must have at least one shareholder, who can be a Director and if you are the only shareholder, you will own 100% of the company.
A director may issue shares depending on how they would like to run the company, and must work out a value for the shares. This can be as little as £1 as to limit the amount that has to be paid if a company is to be shut down and will limit liability to the shareholder.
For example, is a company issues 300 shares at £1 each, the share capital is £300.
When you register the company, you will need to provide information regarding the shares, which is known as ‘Statement of Capital’. This means that you will need to provide details of the names and addresses of all shareholders and the number of shares they hold.
Memorandum and articles of association
When you register the company, you will also need to complete a Memorandum of Association which is a legal document signed by all initial shareholders agreeing to form the company. Along with this, you will need to include the Articles of Association, which is a set of rules about running the company, agreed by all initial shareholders. You can download a template for this from Company House.
Once all the above has been achieved, you are ready to register your company! The cost for registering is currently £12 and can be paid directly through the Companies House secure website.
If you’re looking to go down the route of setting up a Limited Company and would like the advice of Accountants who specialise in this area, get in touch for a no obligation chat about how we could help!