How are Companies Formed in the UK?
Giving your dreams of starting own business in the UK a practical shape and utilization of unique business idea realized from the problem and issues in the society to convert them into a profitable business could be an exciting thing. Apart from the business ideas and the amount of your investment, the company formation process is also important and considered as a bit difficult one due to a number of reasons and legal complications. But by fulfilling the legal requirements with the help of a professional company formation agency, it could be very easy for you to give your dreams a practical shape. Under the business laws and regulations set by Companies House, there are certain steps of company formation in the UK that can make it easy for new business initiators to make their place in the market.
Type of desired company
A company is a legitimate entity with a separate identity apart from the owners and management. There are certain types of companies, including public limited and private limited by shares and by guarantee. The first and significant step is the determination of the structure of your desired business venture. Private limited companies by share are the common type of businesses nowadays in the UK. The business structure may also depend on the reasons for forming the company as well. Under the UK’s Companies Act 2006, one who is looking for developing a business and wants to form a company is required to determine the company nature before going further with the formation process.
Name the Company:
The second but important step of the company formation is giving a unique name to desired or determined business once one is sure about the company structure and feasibility of the business idea. According to the UK’s Companies act 2006, any business cannot have the same name or title until unless the potential business is the part of a group of companies with similar names. Company formation agents always help new business initiators to research the existing ones, and one can ask Companies House too in this regard in order to avoid any similarity in the company names. Without caring about the existing names, one can face legal difficulties like opposition and objections to the company registration applications.
Determination of Shareholders
Among the several advantages of the company formation, is the permission of formalization of the ownership structure of the respective business. Under the regulation by the Companies House, a private limited company by shares must have at least one shareholder with at least one share £0.01, but there is no restriction on the maximum number of shareholders or worth of shares. Consideration of this aspect at this phase in the formation process can be beneficial in clarifying the shares and the rights among the shareholders according to the worth of their shares in the company.
Appointment of Directors and Secretary to the Company
For the day to day business management affairs, a private limited company is required to have at least one director, but there is no restriction on the maximum number of the directors, but it may depend on the company size. Companies may also appoint secretaries to share the director’s responsibilities but are not essentially required to do so. The appointed directors must be of 16 or above in age and should be able to follow the company’s rules, manage the company records and reporting any changes to the respective regularity authorities, timely filings of tax and confirmation statement returns, and pay corporation tax. Under the UK’s company laws, there is no restriction on having overseas directors.
Registered company office address
For the registration of the initiated company with the Companies House, it is essential to provide a registered company office address for the official communications with the company. The provided address must be operational and physical, one within the UK. Apart from the legal requirements, it will also play a significant role in the success of the business as customers trust in companies’ products and services that have any physical existence. The provided company address will be publically available on the online register of the Companies House. One can also keep the business address confidential by utilizing company address services providers.
Complete Documentation to get it registered
For the company registration with the Companies House, which is the major regularity authority in the UK regarding businesses, it is required from the company initiators to submit documents like memorandum of association and articles of association, but it depends on the type of the application. In the case of by-post registration, submission of these documents is essential, but through online registration, it will be generated automatically, but the submission of the articles of association is essential in both cases that can be crafted by using templates provided by the Companies House. Through following these steps, companies are formed in the UK to take advantage of outstanding business opportunities in the country. It is essential to follow the process with a procedural approach and step by step to avoid objection on the company registration applications.