{"id":12565,"date":"2024-07-26T17:29:53","date_gmt":"2024-07-26T16:29:53","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=12565"},"modified":"2024-07-30T17:32:46","modified_gmt":"2024-07-30T16:32:46","slug":"starting-a-company-with-someone-else","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/starting-a-company-with-someone-else\/","title":{"rendered":"Starting a company with someone else: what you need to know"},"content":{"rendered":"

If you\u2019re thinking of starting a company with someone else, there are several considerations to make before you take the first step. Sure, it\u2019s great to have a friend or family member in business with you for support, extra brain power, and stress relief. But is it all as rosy as it sounds?<\/span><\/p>\n

In this blog, we advise how to approach starting a company with someone else. You\u2019ll need to decide who will undertake crucial roles, understand your roles and responsibilities, and learn about the legal considerations. We also explore the pros and cons of starting a company with someone else.<\/span><\/p>\n

Decide who will own and who will run the company<\/h3>\n

First, you must decide who will own the company (be a shareholder) and who will run it day-to-day (be a director). If you\u2019re starting a company with more than two people, don\u2019t worry; multiple people can hold each of these positions.\u00a0<\/span><\/p>\n

Legal requirements<\/h4>\n

Depending on the type of company you want to start, you\u2019ll need to meet the minimum appointment requirements. A private company limited by shares requires at least one shareholder and one director (one person can be both).\u00a0\u00a0<\/span><\/p>\n

When you have multiple people, you can assign these roles as you wish. For example, if there are two of you, you can both be shareholders and directors, or you can split the roles between you.\u00a0<\/span><\/p>\n

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The rules are the same for a company limited by guarantee (a not-for-profit organisation, such as a charity). The only difference is that shareholders are called guarantors.<\/span><\/p>\n

In a limited liability partnership (LLP), you can have two or more partners. These individuals are known as designated members, which are equivalent to shareholders.\u00a0<\/span><\/p>\n

You must have at least two designated members appointed in an LLP at all times to undertake administrative and managerial responsibilities. You can also choose to have non-designated members, who generally have fewer responsibilities.\u00a0<\/span><\/p>\n

For public limited companies (PLCs), you need at least two directors and at least one shareholder, so you need at least two people. Both can be directors, and one can be a shareholder, or you can bring in a third person to take on one of these essential roles.\u00a0<\/span><\/p>\n

PLCs must also legally appoint a company secretary (an optional role for the other company types), for which there are specific qualifying criteria. You can find details of this in <\/span>section 46 of the Companies Act 2006<\/span><\/a>.<\/span><\/p>\n

For the purpose of this article, we will focus on the most popular business structure in the UK, private companies limited by shares.<\/span><\/p>\n

Who can be a director?<\/h4>\n

Company directors have a great deal of responsibility and an extensive list of ongoing duties. These include:<\/span><\/p>\n