The process of company formation in the UK is relatively simple and easy now there are incorporation agents offering simple and easy websites, allowing the whole process to be completed online without the need for any paperwork.
Company formation requires some mandatory documents. The quickest way to deal with these is to use an incorporation agent, who will take care of these issues. Either way, the following aspects will need to be considered:
1. Company Type
Decide on the type of company you would like to form and register. The main types are:
-Â Private Limited Company
-Â Private Unlimited Company
-Â Limited Liability Partnership (LLP)
-Â Public Limited Company (PLC)
2. Choosing the name
It is best to consult the company names index. This will indicate if your proposed name has already been taken, and what similar names are being used. More detailed guidance on this can be found in: The Company and Business Names (Miscellaneous Provisions) Regulations 2009 (2009/1085)http://www.legislation.gov.uk/uksi/2009/1085/contents/madeÂ .
3. Form IN01
This form must be completed and filed with Companies House to register a company. It this form, the following information is listed about the proposed company:
– The name of the company
– The registered office address
– The general details about the proposed company, including a statement of proposed officers, the director(s), and the secretary if it has one, whether it is a public or private company and its intended registered office addressÂ Â
– A statement of capital and initial shareholdings or a statement of guarantee
– Any application for a private company limited by guarantee to seek exemption from the requirement to use “limited” or “cyfyngedig” in the company name (this will not be relevant to most applications for incorporation) (if applicable).
– A section requiring you to confirm you have requested and attached a copy of a statement of support from a government department or other body if your application includes a proposed company name which contains a prescribed or sensitive word (if applicable).
4. The Memorandum of Association
This confirms the subscribers’ intention to form a company and become members of that company on formation.Â In the case of a company that is to be limited by shares, the memorandum will also provide evidence of the members’ agreement to take at least one share each in the company.
Once the company has been incorporated, the memorandum will no longer affect the ongoing operation of the company and it cannot be amended.
5. The Articles of Association
This document sets out the regulations and the governance of the company and its internal affairs. They form a contract between the company and its members. They help to ensure the company’s business runs as smoothly and efficiently as possible and will set out how the company will make decisions and include various matters connected with the shares.Â Every company is required to have articles by law and the articles are legally binding on the company and all of its members.
It is most convenient to use model articles of association. Model articles are available for private companies limited by shares, private companies limited by guarantee and public companies. If individual articles are to be drafted, then it is advisable that professional advice is sought. The type of articles used (i.e. model articles, model articles with amendments or bespoke articles) must be declared in Form IN01 and a copy of the articles will also need to be filed. If no indication is given in the Form, then the model articles will be adopted automatically.
The articles can be amended. If so, then notification of the changes will need to be sent to Companies House. Failure to notify Companies House can result in a Â£200 civil penalty.
There are two ways to form a company and thus the costs vary:
Software filing – specific software must be used to file the various papers. Incorporation agents have this which enables them to offer company formation for as little as Â£25 + VAT. Companies House’s standard fee is Â£15 and the ‘Same-Day’ service is Â£30 (for applications received by 3pm Monday to Friday). This is the easiest of the two methods of incorporating a company.
Paper filing – where a paper application is filedÂ direct with Companies House, then the standard registration fee is Â£20 andÂ the ‘Same-Day’ service is Â£50 (for applications received by 3pm Monday to Friday).Â Companies House aim to process standard documents within 5 days of receipt.