Things You Should Know Before Setting up a Limited Company
Setting up a limited company is a fairly straightforward process but it requires certain steps to be completed beforehand before you can start trading as a limited company. Much of the information can be acquired through the Companies House website and other informational resources but for ease of reference here are a few of the points which you’ll need to take note of before you start your company.
There are typically three ways in which you can start the application process for a limited company – you could either do it yourself by submitting Form IN01 or online through the Companies House website, or you could make use of an agent (usually an accountant) who will complete the process on your behalf. There is a minimal cost involved if you are applying through Companies House which is £12 if you apply through their website and £40 if applying through the post.
Other basic requirements that should be completed include:
Establishing your Business name
Your company name should be unique and should be related to the nature of the type of business you are in. You should create a company name that is broad rather than too narrow to allow for any changes that you may decide to incorporate in your business in the future.
You also need to adhere to Companies House regulations regarding the name of your business, these include creating a name that is distinctly different from any other company, is not offensive, or already trademarked.
Also, don’t forget to register for a domain name that is as close to your company name as possible which can add to the credibility of your website and company profile.
You should have an official registered company address
Your company should have an official registered address (which needs to be a physical address); this is important to receive mail and it is also where your business can be served legal documents if need be. The registered address must however be in the country in which the company was incorporated.
You should also submit company official details
It is compulsory to submit the details of the director and/ or a company secretary to Companies House when applying. The details that will need to be submitted for each shareholder include their name, their address, and a description of the shares that they hold.
How will shares be apportioned?
Formulating the breakdown of how shares will be apportioned amongst shareholders when setting up a limited company should be established beforehand in preparation for when they are declared and can be compiled by your accountant.
You will need a compulsory People of Significant Control or PSC register
All companies including shareholders who own at least a quarter or more of the shares or voting rights of a company require a PSC register that must be updated yearly on a Confirmation Statement and submitted to the Companies House. This is a requirement when setting up a limited company.
You must have an Articles of Association
An Articles of Association is a legal document that stipulates the details and duties of the company’s director and shareholders as well as the rules and regulations of how the company should be run. It also details how company finances should be dealt with and are kept at the company’s registered offices.
You should also have a Memorandum of Association
The Memorandum of Association is the main compulsory legal document that every company should have and details the legal relationship between a company and its shareholders. The Memorandum of Association or MOA supersedes all other company documents including the Articles of Association.
Select the most appropriate SIC code
The Standard Industrial Classification code is required by Companies House for data purposes. You are therefore required to select a SIC code that is most related to your industry on the Companies House website.
If you have managed to complete the steps above, then you are already well on your way to starting your limited company. If you are still contemplating setting up a limited company and require the advice of financial accounting services to assist you along the way, contact DNS Associates today.