Introduction / What is a company? / What is a shelf company? / Who are subscribers? / Who are the shareholders? / Who are people with significant control (PSCs)? / First directors and company secretary / Form of constitution / What is a memorandum of association? / Is a registered office required? / Choosing a company name / Incorporation methods / Procedure for registering a private company / Statement of capital / Fees / Company limited by guarantee / Public company / Certificate of Incorporation / First steps for a newly incorporated company / Company registers and records / Conclusion
Incorporating a limited company is a crucial step for entrepreneurs and business owners looking to establish a separate legal entity for their business.
This article aims to provide a general guide to incorporating a limited company, covering various aspects such as the definition of a company, the process of incorporation, the role of subscribers, and more.
It is also important to note the changes made by Economic Crimes and Corporate Transparency Act (ECCTA) 2023, as they affect how companies are registered and their ongoing filing requirements.
- A company is a business vehicle that is a separate legal entity, distinct from its members.
- It is owned by its members and managed by its directors.
- There are different types of companies available under the Companies Act 2006, including public or private companies limited by shares, private companies limited by guarantee, and unlimited companies.
- A shelf company refers to a ready-made company that has already been incorporated but has never traded.
- It can be purchased from a company formation agent and subsequently tailored to meet specific requirements.
- Subscribers are the first members of the company.
- They are required to allot at least one share each to become shareholders on the company's incorporation.
Shareholders are individuals or entities, such as other companies, who own shares in a company. They are also referred to as members or stockholders.
Shareholders have a financial interest in the company and are entitled to certain rights, such as voting on important matters, receiving dividends, and participating in the company's profits.
In the context of a limited company, shareholders are the owners of the company and their liability is limited to the amount they have invested in the company's shares.
They play a crucial role in the governance and decision-making processes of the company.
- People with significant control (PSCs) are individuals or entities who ultimately own and control companies.
- The PSC register provides information on these individuals or entities and is publicly available at Companies House.
- The PSC register enhances corporate transparency and supports anti-money laundering investigations.
- A private company can have a sole director, while a public company must have at least two directors.
- A public company must also have a company secretary, but a private company is not required to have one.
- The number of directors can be restricted by including such restrictions in the articles of association.
- A company's constitution includes its articles of association, resolutions, agreements, and other relevant documents.
- All companies must have articles of association, which prescribe regulations for the company's management, meetings, and decision-making.
- The person forming the company can prepare tailored articles of association or adopt the relevant statutory model articles.
- The memorandum of association used to be an integral part of a company's constitution but has been simplified under the Companies Act 2006.
- It is a short document submitted to Companies House upon incorporation, stating the subscribers' intention to form a company and become members.
- The memorandum of association is not relevant or alterable after the company's incorporation.
- A company is required to have a registered office at all times for communication and notice purposes.
- The registered office address determines the company's domicile.
- The proposed company name should be checked for availability and permissibility on the public register of companies at Companies House.
- The name should not be already registered by another company or contravene statutory regulations regarding permitted names.
- A company can be registered at Companies House through its online portal, by post using Form IN01 or using a third party company formation agent.
- A private company is formed by one or more subscribers subscribing their names to a memorandum of association and complying with the registration requirements.
- The application to register the company must include the proposed company name, principal business activities, type of company, registered office address, details of directors and secretary, subscribers' details, and a statement of compliance.
- A statement of capital is included in certain Companies House applications or forms related to a company's administration.
- It provides information about the company's share capital, including the amount paid up and any unpaid amount.
- The incorporation fee varies depending on the filing method and the choice of standard or same-day registration service.
- A company limited by guarantee is a type of company where members contribute to the company's assets in the event of winding up.
- The incorporation process is similar to other companies, with differences in the form IN01 and the proforma memorandum of association.
- A public company must have at least two directors, a company secretary, and shares held by subscribers paid up in cash.
- A trading certificate must be obtained from Companies House before the company can do business or exercise borrowing powers.
- Upon satisfying the registration requirements, Companies House issues a certificate of incorporation.
- The certificate provides details such as the company's name, registration number, date of incorporation, type of company, and registered office address.
- It serves as conclusive evidence of the company's compliance with the Companies Act 2006 and its duly registered status.
- After incorporation, the company should hold a board meeting to report the incorporation, write up statutory records, and approve post-incorporation steps.
- A company is required to keep a register of members.
- Non-statutory registers, like a register of transfers, may also be maintained.
- Private companies have the option to keep certain information on the central register maintained by the registrar
- Also note that significant changes to company filing requirements have been introduced by the Economic Crimes and Corporate Transparency Act (ECCTA) 2023- see further details here.
Incorporating a limited company involves various considerations and steps, from choosing a company name to filing the necessary documents with Companies House. This guide provides an overview of the process, highlighting key aspects such as the role of subscribers, the importance of company registers, and the requirements for different types of companies.
See also: Economic crime and corporate transparency- update
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Note: This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. The information contained in this document is intended to be for informational purposes and general interest only.
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