It’s now really easy to register a company – long gone are the days when you had to file paper forms, wait weeks for approval and pay a princely sum for the privilege.
While some people looking to start a company will ask their accountant or solicitor to handle the few online formalities, an increasing number of people are taking control of their company from the very start and registering it themselves.
In this guide, we look at the step by step process of how to register a company. So if you have a new business in mind and want to join over 500,000 people a year turning their ideas and enthusiasm into a new UK limited company registered with Companies House, read on and learn how easy it can be.
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1 Decide if it’s really a limited company that you need
It might seem obvious, but before going any further, give a little thought to whether a limited company is the best form for your business to take.
A private limited company does have a number of important advantages – possessing most of the legal rights of an individual and offering substantial protection to shareholders from the liabilities of the business. But there’s also a need to maitain company records and file accounts and other documents with HMRC and/or Companies House.
If you want more information, check out our article about why so many people form limited companies for their business.
2 Choose a good company name
A great company name can be a real asset to the business, but it’s something that many people agonise over – or, perhaps worse, rush to a hasty choice that they later regret.
There are a number of rules governing what can be chosen as a company name when you register a new company, the most important being that it’s different from any company that already exists. A new limited company must get approval from Companies House of any name that’s proposed.
Take a look at our article where we look in detail at how to choose a great company name. And once you have a good name, you can use our handy company name checker to make sure it’s available. We also perform a number of the same checks as Companies House to help you get it right first time when you register a company.
3 Assemble the details needed to register the company
There’s several pieces of information that you’ll need to have available in order to register a new company. You can refer to our new company registration checklist for the full list, but the information needed mostly relates to the following:
- The company name
- A UK registered office address – to which Companies House will direct official mail and which appears on the publically available company record
- What the company plans to do – at least one SIC code describing the anticipated activities of the business must be provided
- Details of the share capital to be created – for a private company limited by shares, at least one share must be issued
- Company director and, if required, company secretary details –there must be at least one human director aged at least 16 for a new private limited company
- Initial shareholder details – there must be at least one initial shareholder, who can be the same person as a company director
For each shareholder, as well as basic details you’ll need a few pieces of identifying information for security purposes – any of the person’s National Insurance number, eye colour, telephone number, mother’s maiden name, father’s first name and passport number.
From 30 June 2016, details of people with significant control over the company must also be provided. These may include anyone with more than 25% of the shares in the company or other individuals or relevant legal entities.
4 Prepare Memorandum and Articles of Association
The memorandum and articles of association collectively make up the constitution of the company.
By completing the memorandum of association, which is a short document which tends to include a number of standard clauses, the subscribers to the initial shares confirm their agreement to start a company. The memorandum of association must be filed with Companies House as part of registering a company.
The articles of association are the “rule book” of the company, defining how the company is to be run by the directors on behalf of the shareholders. A great number of companies adopt the private company Model Articles which cover most circumstances. If there are unusual requirements the company can instead adopt bespoke articles – in those cases, it’s worth seeking legal advice.
The memorandum and, in the case of bespoke variants, the articles of association must be filed with Companies House when registering the company. This can be done electronically rather than sending paper copies and a system like Inform Direct will create, fill in and send these documents automatically.
For those bravest souls who want to read more about these documents, in another article we look in detail at the memorandum and articles of association.
5 File the incorporation with Companies House
So, you’ve collected together a load of information. Now you need to send it to Companies House for approval: there’s 3 different options, for which different fees are charged by Companies House:
- Online filing through dedicated software – the standard fee is £10. As well as validating and sending the new company details, many of these software packages offer additional services to those registering new companies. Inform Direct is in this category.
- Web incorporation through Companies House’s online portal – the standard fee is £12.
- Paper filing the IN01 form – the standard fee is £40. You’ll need to complete and send the IN01 form and supporting documents to the appropriate office. On their website, Companies House suggest that standard applications are likely to be processed within 5 working days of receipt.
6 Wait for the company formation to be approved
You can’t start to operate the business as a limited company until you receive approval from Companies House, who will undertake some checks of the information you’ve submitted. Thankfully, if you file online, approval of your new company is quite quick – using Inform Direct, where we do a lot of the necessary checking before even submitting the incorporation to Companies House, we’ve had new company registrations accepted in as little as 6 minutes.
If you register a new company using paper forms, the process of approval will take longer.
7 Hold the company’s first board meeting
Once you have Companies House approval of your new company, you’ll need to hold a meeting of the directors to cover some of the necessary formalities. It’s best to do this within a few weeks of registering the company and to make this as easy as possible, we’ve put together a guide to what needs to be covered and template minutes of the first directors’ meeting.
8 Set up company registers (and then maintain them)
The law requires each company to set up and then maintain company books, which include:
- Register of Directors
- Register of Directors’ Residential Addresses
- Register of Secretaries
- Register of Members (otherwise known as Register of Shareholders)
- Register of People with Significant Control
- Register of Allotments of Shares
- Register of Share Transfers
- Register of Mortgages & Charges
You can buy template paper registers to fill in by hand. Better still, straightforward online products like Inform Direct will automatically update electronic statutory registers whenever you made changes to the company, its officers and shareholders.
9 Produce share certificates for the first shareholders
In the first board meeting, the directors will have authorised the issue of share certificates for the shareholders in the company. Although the Register of Members mentioned above is the essential evidence that someone is a shareholder in the company, the vast majority of companies still create and issue share certificates – and shareholders expect to receive them.
Elsewhere on our blog, you can read about the requirements for valid share certificates. You can also check out why so many companies are using Inform Direct to create and manage share certificates.
10 Other tasks to do once the company has been registered
There’s a number of other important tasks you’ll want to consider once the company has been successfully registered, which might include:
- Setting up a bank account
- Registering with HMRC, which may include registering for VAT
- Registering and setting up PAYE for employees
- Setting up a website, particularly if you want customers to find you online
- If it’s important to your particularly business, registering a trade mark
If you’re looking to register a new company, we hope you find it a rewarding experience. Whether you’re starting your first company or are a company registration veteran, we’d love to hear any ideas and tips: contact us with details and we’ll look to share them with other readers.
Ready to register your new company? Do it the easy way from just £28 all inclusive. Just a simple and straightforward online process.