Incorporation of a Private Limited Company in the UK
There is a common misconception that it is both difficult and expensive to incorporate a private limited company in the UK. Within a few hundred words and one minute of your time, it is hoped that this misconception will be dispelled. Any idea how much the official fee is for incorporating, for instance? £20. Well, £21 if you include the cost of the postage stamp.
Note that Companies House has launched a Web Incorporation Service in conjunction with the government’s website for business, www.businesslink.gov.uk/WebInc. The service allows anyone to set up a limited company, with model articles, for a statutory fee of just £18; this is a key part of the government’s aim to make the UK one of the easiest and most cost effective places to start a business.
Information you need
First, you need to know certain simple administrative pieces of information, together with basic corporate structuring details. These are:-
(a) Proposed company name
(b) Registered office
(c) Directors’ name(s), address(es), nationality, DOB, occupation
(d) Company secretary’s name, address
(e) Shareholders’ name(s), address(es)
(f) Number of shares to be issued (can be as few as one)
(g) Type of shares to be issued (usually ordinary shares)
(h) Share allocation
(i) Rights attaching to shares (can say, for instance, all shares have equal voting rights)
(j) Whether Table A Articles of Association have to be adopted or whether tailored.
If you have more than one director or shareholder, or your Articles of Association are to be tailored, it is very much worth consulting a lawyer, especially if a Shareholders’ Agreement is required. Otherwise, at least initially, the company can be incorporated entirely by yourself. For speed consider using a shelf-company, which is a company that has already been incorporated under some other name with other shareholders and company secretaries. For a further example and info on shelf companies, see UKincorp’s website or ask any decent-sized law firm in the UK, which will already have several shelf companies waiting to be tailored and transferred. Otherwise, follow the below instructions on the Companies House Form IN01.
Form to complete
1. Complete Form IN01. Example below.
2. Tailor Articles of Association if required. Otherwise choose to adopt Table A articles. You can always amend your Articles of Association later.
3. Obtain signatures from secretary, directors and shareholders.
4. Quickly fill out a Memorandum of Association, which is now extremely short.
5. Draft and send a simple letter to Companies House, Companies House Fourth Floor Edinburgh Quay 2 139 Fountainbridge Edinburgh EH3 9FF, saying you enclose completed form IN01 + cheque for £20 made payable to Companies House. (example letter below)
Provided Companies House doesn’t bounce your form, you will receive an incorporation certificate within a couple of weeks. After that, you can focus on your business.
For good housekeeping, draft board minutes to record meetings of directors to give authority to your company to do certain acts. Keep accounts up to date and generally keep other paperwork secure. Company books aka “statutory registers” should ideally be produced at an early stage. For all other forms that you may require from time to time, see Companies House’s library of documents here.
You may also want to thinking about setting up virtual offices. Consider, for instance a virtual office London location – while you don’t necessarily need to have a physical presence, you can present, at least online, as if you have a great office location.
The law that governs companies is mainly housed within the Companies Act 2006. Guidance on the web of the Companies Act 2006 is plentiful and it is not intended that any of it is reproduced here. Suffice to say, use your common sense, remembering always that your limited company is a separate legal entity from yourself. Its liability is limited by the price of shares paid up. If you have one share at £1, its liability is limited to that. BUT there are certain circumstances in which the veil of incorporation can be lifted by the courts, making you, as director or shareholder personally liable. Again, just use your common sense and you will, for the most part, be safe and sound.
Your best friend is the Companies House homepage and especially the Companies House WebCheck service, which corporate solicitors use literally every single day, in addition to the Companies House Direct subscription based service, which lets you view every document lodged at Companies House by every company in the UK.
Note in particular this useful guide to starting a company:- https://www.gov.uk/topic/company-registration-filing/starting-company
That really is a bit of an idiot’s guide to company incorporation, so if you have any questions, get in touch with your lawyer or please do not hesitate to ask in the comment box below. Further, if you have pearls if wisdom you’d like to share, please do so, also, in the comment box below. Happy incorporating and I shall see you in the corporate world very soon.
FREE Examples / Styles
PS Here’s the draft form used to incorporate Wardblawg Limited, in pdf format, which you can save as and draft in your own details. The signed version of my IN01 is a public document within Companies House but you need to be subscribed to Companies House to see it.
PPS here’s a style letter to send to Companies House.
Style Letter to Companies House to incorporate