{"id":5791,"date":"2019-02-11T18:22:34","date_gmt":"2019-02-11T18:22:34","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=5791"},"modified":"2024-01-30T10:18:13","modified_gmt":"2024-01-30T10:18:13","slug":"5-things-need-form-limited-company","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/5-things-need-form-limited-company\/","title":{"rendered":"5 things you need to form a limited company"},"content":{"rendered":"<p>The UK has worked hard to make starting your own company easy, and this includes incorporating your business as a limited company. Below, we provide a list of 5 items that you\u2019ll need to bring to the party before you begin the company formation process.<\/p>\n<h3>What you need to form a limited company<\/h3>\n<h4>1. A company name<\/h4>\n<p>One of the most exciting aspects of company formation is <a href=\"https:\/\/www.gov.uk\/limited-company-formation\/choose-company-name\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">choosing a\u00a0company name<\/a>. There are some rules that Companies House imposes regarding what you can name your company:<\/p>\n<ul>\n<li>Your company name needs to be unique. It can\u2019t be in use by any other registered company, and it must not be deemed too similar to an existing company name. To determine if the name you\u2019d like to use is available or taken, use our <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/\" data-wpel-link=\"internal\">company name search tool<\/a>.<\/li>\n<li>You aren\u2019t allowed to use offensive words, and you need to be wary of using &#8216;sensitive&#8217; words. You\u2019re not allowed to suggest any connection to the government or any public authority, nor can you use any words otherwise protected, unless you have express permission from the relevant authority.<\/li>\n<li>Your company name will be limited to 200 characters and it needs to end with the word \u201climited\u201d or its abbreviation \u201cLTD\u201d. Some exemptions do exist.<\/li>\n<\/ul>\n<p>Companies House provides <a href=\"https:\/\/www.gov.uk\/government\/publications\/incorporation-and-names\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">official guidance on company name rules and requirements<\/a>, which includes the full list of restricted &#8216;sensitive&#8217; words and expressions. We recommend referring to this guidance before registering a company name.<\/p>\n<h4>2. Registered office address<\/h4>\n<p>Your company\u2019s\u00a0<a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/registered-office-i-need-one\/\" data-wpel-link=\"internal\">registered office address<\/a> is its legal headquarters; it&#8217;s home in the eyes of the law. Every registered company in the UK must have one.<\/p>\n<p>This is the address that will be used for the delivery of all government correspondence with your company, as well as for storing your statutory company registers for inspection. There are several rules surrounding the type of address you can use as a registered office:<\/p>\n<ul>\n<li>It must be in the jurisdiction in which you incorporate your company (England and Wales, Scotland, or Northern Ireland). Whilst you are free to change your registered office at any point after incorporation, you cannot change the jurisdiction in which your company is registered.<\/li>\n<li>It must be a physical address<\/li>\n<li>You cannot use a PO Box number or DX number<\/li>\n<\/ul>\n            <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/services\/registered-office-address\/\" class=\"related related-buy\" data-wpel-link=\"internal\"><span class=\"related-title related-buy-title\">A Central London registered office for your company<\/span><\/a>\n        \n<p>It\u2019s important to note that your company\u2019s registered office address will be made publicly available on the <a href=\"https:\/\/www.gov.uk\/guidance\/your-personal-information-on-the-public-record-at-companies-house\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">central register of companies at Companies House<\/a>.<\/p>\n<h4>3. Service address<\/h4>\n<p>All company directors, secretaries, subscribers,\u00a0<a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/understanding-confirmation-statement-psc-register\/\" data-wpel-link=\"internal\">People with Significant Control<\/a> (PSC), and LLP members need to provide a service address when incorporating a company. The service address is the official contact address that HMRC and Companies House uses to contact you in relation to your role in the company.<\/p>\n<p>The following rules apply to a service address:<\/p>\n<ul>\n<li>It can be anywhere in the UK or overseas<\/li>\n<li>It must be a physical address<\/li>\n<li>You cannot use a PO Box number or DX number<\/li>\n<li>Your service address can be the same as your registered office address<\/li>\n<li>You are only allowed to use one service address at a time, but you can change your service address at any time<\/li>\n<\/ul>\n<p>Just like your registered office address, the service address of members will be displayed on the public register.<\/p>\n<h4>4. At least one director<\/h4>\n<p>To form a limited company, you will need to appoint at least one natural (human) <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/what-is-a-limited-company-director\/\" data-wpel-link=\"internal\">company director<\/a>. It is his\/her responsibility to make decisions on behalf of the company and oversee day-to-day operations. Almost anyone is allowed to be a company director, the only restrictions being:<\/p>\n<ul>\n<li>You cannot be under the age of 16<\/li>\n<li>You cannot be an <a href=\"https:\/\/www.debtadvisorycentre.co.uk\/blog\/what-does-undischarged-bankrupt-mean-0-4051-0#:~:text=Undischarged%20bankrupt%20is%20a%20legal,debts%20that%20you%20cannot%20afford.\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">undischarged bankrupt<\/a><\/li>\n<li>You cannot be a <a href=\"https:\/\/www.gov.uk\/search-the-register-of-disqualified-company-directors\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">disqualified director<\/a> whose term of disqualification isn\u2019t yet expired<\/li>\n<li>You cannot be the auditor of the company<\/li>\n<\/ul>\n<p>Directors aren\u2019t fixed appointments. New ones can be appointed and old ones can be removed as necessary after incorporation, in accordance with the company\u2019s articles of association.<\/p>\n<h4>5. At least one member<\/h4>\n<p>You will need at least one member (shareholder or guarantor, depending on what type of company you form). Members are the people who own a company.<\/p>\n<p>The vast majority of companies are private companies limited by shares, whose purpose is to make a profit and distribute it to the owners or shareholders.<\/p>\n<p>Where the company is to be limited by guarantee, the members agree to \u2018guarantee\u2019 a certain amount of money to pay into the company if it ever experiences financial difficulty.<\/p>\n                                                    <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/business-bank-account-company\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Should I open a business bank account for my company?<\/span><\/a>\n                    \n<p>The director and shareholder can be the same person, so if you are forming a company on your own, you can name yourself for both positions.<\/p>\n<h3>Other Considerations<\/h3>\n<p>The five items mentioned above are the things you need to get the company formation process started. There are of course other matters to consider when incorporating a company, but these are supplied to you by your company formation agent as part of their online registration service.<\/p>\n<p><strong>Standard Industrial Classification (SIC) code<\/strong> \u2013 A <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/choosing-sic-code-limited-company\/\" data-wpel-link=\"internal\">SIC code<\/a> identifies the sort of business your company will undertake and is used for information purposes by a number of third parties including government agencies. Your company needs to submit at least one of these codes on incorporation. Quality Company Formations (and other formation agents) supply a SIC code finder, making it easy for you to choose the required SIC code or codes.<\/p>\n<p><strong>Memorandum and articles of association<\/strong><em> \u2013<\/em> These two documents make up the foundation of your company\u2019s constitution<em>. <\/em><\/p>\n<p>The memorandum is a declaration by the company\u2019s first shareholder or shareholders agreeing to form a company. The articles of association outline the basic rules and governance of the company (such as how decisions are to be made and what powers are granted to the directors).<\/p>\n                                                    <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/memorandum-and-articles-association\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Memorandum and articles of association for UK limited companies<\/span><\/a>\n                    \n<p>Under the Companies Act 2006, companies can use the <a href=\"https:\/\/www.gov.uk\/government\/publications\/model-articles-for-private-companies-limited-by-shares\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">\u2018Model Articles\u2019<\/a> which is a basic set of articles you can use if you do not have or wish to create your own.<\/p>\n<p>After incorporation, the memorandum becomes a historical document and can never be changed, but your articles can be amended with the agreement of the shareholders.<\/p>\n<p><strong>Company type<\/strong> <em>\u2013 <\/em>A company limited by shares is the most common type in the UK and the go-to choice for most businesses. However, when you reach the incorporation stage, you may find it appropriate to form a different type of company.<\/p>\n<p>Examples of other company types include limited by guarantee (often used by non-profit organisations), <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/limited-liability-partnership\/\" data-wpel-link=\"internal\">limited liability partnership<\/a> (LLP), and public limited company (PLC). You cannot change a company type following incorporation.<\/p>\n<p><strong>People with Significant Control (PSC) Register<\/strong> \u2013 Almost all companies registered in the UK are required to record all <a href=\"https:\/\/www.gov.uk\/guidance\/people-with-significant-control-pscs\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">People with Significant Control<\/a> on incorporation. Thereafter, these details must be entered and kept up to date in the PSC register, which records every individual and relevant corporate entity that has control over the company.<\/p>\n<h3>Why choose company formation?<\/h3>\n<p>Company formation is the process of registering a business as a limited company through Companies House. Companies House is the official registrar of companies for the UK.<\/p>\n<p>By forming (or \u2018incorporating\u2019) a limited company, you will be turning your new business into an independent entity in the eyes of the law. This means that your company officially transforms into an independent legal &#8216;person&#8217;, which is crucial for protecting your own personal financial wellbeing,<\/p>\n<p>If your business turns out to be an unsuccessful venture, a limited company structure creates an important separation between your own finances, assets, and contracts and those of the business. As the owner of your new limited company, you can only be held financially liable, in almost every circumstance, for the amount up to the <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/company-shares-paid-partly-paid-and-unpaid-explained\/\" data-wpel-link=\"internal\">nominal value of the shares<\/a>\u00a0you have in that company.<\/p>\n<p>This is called \u2018limited liability&#8217;.<\/p>\n                                                    <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/contacting-hmrc-set-new-limited-company\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Contacting HMRC when you set up a new limited company<\/span><\/a>\n                    \n<p>Whilst there are several different types of limited companies in the UK, most private limited companies are limited by shares. This means that ownership of the company is divided between a predefined number of shares. However, more shares can be added or taken away at a later point, provided the appropriate authorisation is given by the shareholders or directors, in accordance with the company&#8217;s articles.<\/p>\n<p>Just to be clear: it is not a legal requirement to form a limited company in the UK. You are free to do business as a sole trader, but if you choose this route, any finances or assets you own will be considered fair game in the eyes of the law, if your business goes under.<\/p>\n<p>That\u2019s why so many business owners choose to play it safe by forming a limited company \u2013 and because the process of forming a company is so fast and affordable, it\u2019s an easy decision for most individuals to make.<\/p>\n<p>Quality Company Formations provides a range of company formation packages, including several different types of company structure, to suit most requirements. Check out our <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/formation-packages\/\" data-wpel-link=\"internal\">company formation packages<\/a> for options and prices.<\/p>\n"},"excerpt":{"rendered":"<p>The UK has worked hard to make starting your own company easy, and this includes incorporating your business as a limited company. Below, we provide a list of 5 items that you\u2019ll need to bring to the party before you begin the company formation process. What you need to form a limited company 1. A&hellip;<\/p>\n","protected":false},"author":10,"featured_media":6081,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1231],"tags":[],"class_list":["post-5791","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-formation","category-1231","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.5 (Yoast SEO v23.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>5 things you need to form a limited company<\/title>\n<meta name=\"description\" content=\"Read our guide on the 5 things you&#039;ll need to form a limited company, including a company name, the statutory addresses, officers and members, and more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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