Once you have made the decision to run your business as a Limited Company, you have to set it up as a legal entity. Depending on your business, this can be a very straight forward process that takes only a few minutes online.
A Limited Company is an organisation with its own legal identity that does business under its own name. It pays taxes, can acquire debt and has its own bank account. It is run by at least one director and is registered at Companies House.
To set up a Limited Company you have to follow these steps.
1. Decide on a company name
The Company name needs to be unique. It can be either the owner’s name, a description of the business or a made-up word – as long as it’s not offensive, doesn’t contain sensitive words or claims an unsubstantiated affiliation with an authority.
2. Decide on a company address
The Company address is the address all official correspondence will be sent to. This can be the owner’s address or a service address. This can be your accountant’s office.
3. Who will be the Company director(s)
If you’re the only person running a Company, you will most probably choose to be the Company director. You can also appoint other directors if you wish and a Company secretary to share the various responsibilities.
4. Work out your shares
If the Company is ‘limited by shares’ you need to work out how many shares will be issued and who the shareholders are. It is possible to have only one shareholder.
5. Memorandum and Articles of Association
You need to prepare these two documents. There are online templates at Companies House which are sufficient for most Companies. You can, of course, draw up your own. The Memorandum is a document signed by all original shareholders that verifies the agreement to form the company. The Articles are the written rules signed by the directors, secretary and shareholders.
6. Register the Company
Once you have collected all the above items you are ready to register your Company. If your Company is ‘limited by shares’ and uses standard Articles of Association, you can register online. Otherwise you need to register by post using the IN01 form. Online registration is only £12, whereas postal registration is £40.
Once you are registered you will receive a Certificate of Incorporation containing your Company name and registration number. This proves that your Company legally exists.
You will also have to register for Corporation Tax within 3 months of starting to trade.
Here at Alba we can help you with this process. So, if you have any questions about setting up a Limited Company or whether this is even the right step for your business, please get in touch. You can reach us via email admin@alba.uk.com or phone 01509 853779.