How to start a business

Starting a UK limited company is simple. Very often the only hurdle that gets in the way is jargon; ‘company-speak’ that formation agents, accountants and Companies House (the UK’s registrar of companies – we’re busting jargon already!) continually drop onto websites and into conversations. In this, our latest StartUp TV, we look at exactly how simple it is is to form a UK company limited by shares … don’t worry, we explain what that means too!

Video Transcription

A private company limited by shares is a very popular company structure. This is for two main reasons:

• Tax Benefits
• Limited Liability – this means, if it all goes wrong, the owners do not have to pay out of their own pockets, their liability is limited to the amount of shares they own, hence company limited by shares

Unique Company Name

The Company Formation MadeSimple homepage has a ‘company name availability’ search box. Simply enter your proposed company name and we’ll immediately let you know if your name is available.

The company name must be unique, can not be too similar to another company and should also not contain any ‘sensitive words or expressions’. These are a collection of words that Companies House will not allow you to use without permission from a particular body. For example, you can’t use the word ‘Dental’ in a company name without permission from The General Dental Council.

See here for a full list of these sensitive words and expressions.

Please note, your company name must end in Limited or Ltd (you can choose which version you prefer).

Company Formation Packages

The next step is to select your package. We offer different packages that can be found here.

It’s worth mentioning that all of our formation packages include the £13 Companies House filing fee – it’s for this reason that when you add VAT to the prices, the figure appears to not quite match up. This is simply because we’re removing the £13 fee before adding the VAT.

The Registered Office

Now the first step in the actual company formation process is to add a registered office address.

This is the official address for the company and where Companies House and Her Majesty’s Revenue and Customs (HMRC) will send all company documentation.

Important information about the registered office:

• It is on the public register (and so easy for anyone to find)
• It must be in the UK
• Directors (more on these in the next step) must be ‘contactable’ from the address – this means if mail is sent to the address, it must be forwarded on
• Permission from the property owner should be granted before using an address as the registered office, so whilst it’s fine to use a residential address (we point you back to the public register note), you must have permission from the landlord

Directors

Now you need to appoint at least one director. Directors are tasked with the running of the company. To appoint a director you need the following information:

• Full name
• Date of birth
• Occupation
• Service address – similar to the registered office, this is the official address for the director and is on the public register
• Residential address – this must be the actual residential address but it is not on the public register (unless you use a residential address as the service address)

Shareholders

Next up is the shareholder; the owner of the limited company. All limited companies must have at least one shareholder and this can be the director – this means a limited company can be formed with just one person.

When appointing the shareholder you need the following:

• Full name
• Service address
• Eye colour
• Town of birth
• Telephone number

You also need to allocate shares to your shareholders. These define how liable someone is and how much of the company they own if there’s more than one shareholder. For example, if you wanted a 50 50 split between two shareholders you just need to ensure that you allocate the same number of shares (worth the same value) to each shareholder.

Memorandum and Articles

These are the documents that outline how the company will be run. We have drawn up a set of Memorandum and Articles that suit the majority of companies, however, you do have the option to upload your own if you wish.

Review and send the application

The final step is to review all the information that you’ve provided ensuring there are no typos or other mistakes. In particular, you should review the company name as there is a £8 charge for changing this once a company has been formed.

If you’re happy with everything select the ‘Submit’ button. Your application is sent off to Companies House where it’s normally accepted within a matter of hours (provided the application was sent Monday-Friday during working hours).

As soon as your company has been formed we’ll notify you via email. You’re then good to go!

Thanks for taking the time to watch our video / read our blog. If you have any questions simply take a look at our website or get in touch and we’ll be happy to help.

Start your business today

By Mathew Aitken at MadeSimple