There are a few different ways you can operate as a business here in the UK.
Using a Limited Company is one of those methods and it’s the one we’ll be focusing on in this article, from the process of starting your own Limited Company, what things you need to keep an eye on or ensure you do and finally, good practices to get up and running.
There’s also a free downloadable checklist at the bottom of this article for anyone who likes ticking things off in a regimented fashion - we got you.
So, you’ve decided that the Limited Company approach is the right one for you and your business. That’s great. The next step is actually creating one and getting set up.
The Companies House Website, now also commonly known as the .Gov website here, allows you to manage and create a company on your own. The cost for incorporation is a nominal £15 with Companies House directly but you do need to prepare the registration and the documentation yourself, including share certificates and board meetings. That said, it can be an easy way to get up and running relatively quickly.
A Limited Company can come in a few forms. One is Limited by Shares and there is another which is Limited by Guarantee. Limited by Shares is the main option, which is what most companies will choose and involves having shares and shareholders which determine the rightful owners, or at least the split of ownership, within the company.
Limited by Guarantee is slightly different and more often seen with community projects and non-profits. These have members instead of directors and no shareholding. Each member functions in a similar way to directors but today we’re going to focus on companies Limited by Shares.
For these types of companies, you will need the following;
- A unique business name
- At least one director
- At least one shareholder
- A registered office address (available publicly on the company register)
- £15.00 incorporation fee
The business name will be your first obstacle and try to have a few alternatives in mind, just in case your preferred one is taken. It’s similar to domain names when registering for those - if someone else has one then you can’t have it. However, sometimes you might find a dissolved business (one that has been closed) has your name and in some cases, you can request to take this name over. With this, please bear in mind that taking a name from a dissolved company might have a negative effect on your future branding and company perception if the previous company had maybe racked up a lot of debt and was in a similar industry, for example.
If your chosen name is available, or you come up with the one you like, you can proceed to then add the directors and shareholders of the business. Chances are, these will both be you. You can be a director AND a shareholder at the same time and the roles are slightly different. Directors are people who run the company for all intents and purposes. They are required to sign off company accounts, make the big decisions and are responsible usually for any taxes that become due.
Shareholders are a bit more silent usually and can be anything from sole 100% shareholders to small portfolio investments of 1% or 2%. Depending on the percentage, shareholders have different levels of control or influence but as long as you own more than 51% of the company, you will be the one calling the shots.
A registered office address is crucial and if you have premises then this is no problem - you can use this for your Directors’ Service address too. If you don’t, and you’re thinking of using your home address as you work from home then be careful. Your registered office address and Directors’ Service address are publicly available on Companies House and so you need to be careful with security.
There are many options, from either using your own business address or using a Registered Office Service where you use someone else’s address as the front of your business. This is something we offer as well, which includes mail scanning as well so you can get your post sent to one business location in London. Some businesses even have an address in London for example, purely for marketing/SEO reasons and for having that presence.
However, sometimes the convenience of knowing it is done right is great value for peace of mind. In those cases, here at Cone we can perform Company incorporations and provide you with all the documentation afterwards. We can also help you get started with certain banks as well.