Make sure that you’ve got all the information you need about forming your Limited Company. Here are some commonly asked questions about company formation to help you understand the basics.
Why should I form a Limited Company?
A Limited Company means having “limited liability”. The most important reason for forming a Limited Company is that it can help protect you from risks to your home and other assets because your liability is limited.
There are also other benefits to becoming a Limited Company, including protection for your trading name (provided it does not breach an existing trademark registration), the credibility of having Limited Company status, and you may also be eligible for tax relief, subject to certain conditions (for more information, contact a qualified accountant).
What are the basic requirements of forming and running a Limited Company?
There are 5 basic requirements for forming a Limited Company. You need:
- a registered office (in England or Wales to register with Companies House Cardiff, or in Scotland to register with Companies House Edinburgh)
- 1 or more company directors
- 1 or more PSC (person with significant control). This is someone who owns or controls your company. They’re sometimes called ‘beneficial owners’. This might be you, or someone associated with your company.
- to file a confirmation statement and submit accounts to Companies House each year
- to keep your company register up to date
There is no longer a legal requirement to appoint a company secretary, however companies with only one director will often require a second signature on legal documentation (for example when you open a bank account). If you do not appoint a company secretary this documentation will need to be signed by an appointed witness and many companies are still opting to appoint a company secretary.
For other options and extras to help you in forming and running your company see our options section.
What should I do with the documents I am likely to encounter?
The best advice concerning documentation of any kind, is always make a copy and keep it in an organised file. This will ensure that you have a record of all your company’s details and activities readily available to you. All documents (or copies of documents which should be returned to Companies House) should be kept in a safe place.
When your company has been incorporated we will send you several important documents which you will need. These will include:
Share certificates
These certificates serve as proof of ownership of shares in your company. The share certificates need to be completed in line with the stock transfer form and the members records shown in the statutory register. The completed share certificates must then be sent or given to the share holder(s) named.
Memorandum and Articles of Association
The memorandum and articles of association set out your company’s constitution. Your bank may ask to see a copy of these important documents.
Certificate of Incorporation
This is a unique document issued by Companies House which confirms your status as a limited company. This certificate should be displayed in your place of business or retained in a safe place. Replacements can be obtained, but they have to be paid for. The bank will ask to see a copy of this document as evidence that your company has been incorporated.
