Company Incorporation - Frequently Asked Questions
- Incorporating a Company - what does it mean?
- What type of Company do you wish to set up?
- Setting up a company at Companies House
- What paperwork do you need to incorporate a Limited company.
- What if I don’t want to incorporate now but want to reserve a company name to stop anyone else using it.
Incorporating a Company
Incorporation is the name given to the creation of new limited company. When you incorporate a business it becomes separate from the person who owns or manages it, it becomes a legal entity in its own right. You can only become a limited company under the Companies Act 2006, by incorporating it at Companies House and it is entered onto the register.
You can limit the liabilities of the company, so that the members are limited by the number of shares.
Before you incorporate a company, whether simple or complex, we would always suggest getting professional advice by speaking to an accountant or solicitor to ascertain whether this is the best model for your business, or whether being a sole trader, LLP etc is more appropriate.
What type of Company do you wish to set up?
There are 4 main types of company
- Private company limited by shares – each member invests into the share capital and the liability is limited to that investment. Any debts of the company are not the personal debts of the members. The shares cannot be offered to the public.
- Private company limited by guarantee – there is no share capital and the members are guarantors rather than shareholders, the liability is limited to the amount that they contribute to company’s assets. Usually non-profit making organisations.
- Private Unlimited Company – there is no limit to the members liability
- Public Limited Company – it has share capital and limits the liability of each member but the shares are available to the public to buy and may be quoted on stock exchanges.
Setting up a company at Companies House
If you have a relatively simple business structure, i.e. it is only you or a few shareholders all having an equal share, you can sign up online at I-Support Formations, you can use the standard mem and arts (or upload your own) and then depending on the package you choose we can create your own company registers, which can be held at the registered office.
This costs from £13 and you need to have a few details ready before you apply and usually takes about 2-3 hours but can be up to 24 hours depending on Companies House workflow – in most cases it is quicker.
If you need the company set up the same day you can apply for the “same day” service but it costs extra and you need to apply before 3pm.
What if I don’t want to use the online service?
You can file paper versions by posting them to the relevant office, but obviously it takes linger for these forms to be processed. This is reflected in the price and costs £40 or £100 if you want “Same Day” service. This can take 5 days from receipt of your paperwork.
Make sure that you use black ink in bold lettering, using a good quality printer. Use A4 size originals in portrait format as sometimes photocopies will not scan.
If you have a slightly more complicated structure we would always recommend speaking to an accountant or professional formation agent so that there are no tax, share or dividend implications further down the line.
What paperwork do you need to incorporate a Limited company
- You will need an application form (IN01) and pay the fee
- Memorandum of association
- Articles of association (if you adopt the model articles you don’t need these)
- If you have a sensitive word in expression in your company name you will need to provide additional information.
What if I don’t want to incorporate now but want to reserve a company name to stop anyone else using it
You are unable to reserve a name, but you can incorporate the company and notify HMRC that it is dormant (i.e. not trading).
You will still have to file paperwork and dormant accounts etc so get advice first but it will ensure that you retain the right to the company name and prevents anyone else using the name at Companies House.
Further Information
