How to set up a company?
Setting up a company is a big step but it is also one of the smartest way to get paid for your work. With your own company, you can create and secure your own brand and run the business in the most tax-efficient manner.
Steps to setting up a company
Selection of company type
There are different types of companies such as Private Company Limited by Shares (LTD), Private Company Limited by Guarantee, Private Unlimited Company, Public Company (PLC) and Limited Liability Partnership (LLP) which is an alternative business vehicle which also gives the benefits of limited liability. However, as vast majority of business start-ups, freelancers, contractors and small businesses will opt for a Private Company Limited by Shares (LTD), we will concentrate on this particular type of company.
Incorporation of a Private Company Limited by Shares (LTD)
A private limited company can be registered either by sending traditional paper forms and documents to Companies House or electronically using electronic company formation system.
Registration of a company using paper documents – In the UK only minority of companies is registered this way. To register a company the appropriate documents must be delivered to Companies House along with the incorporation fee of £40 for normal service or £100 for an expedited same day company formation service. The documents which must be delivered are Companies House Form IN10 (Application to register a company), Memorandum of Association and Articles of Association.
Electronic incorporation – this type of incorporation is the quickest and cheapest way to register a limited company. A company formation application can be completed and submitted either directly through Companies House Web Incorporation Service or via a UK company formation agent. Although this part of the process may be considered to be tricky, it is actually relatively simple and easy when using an experienced professional online company formation agent which is approved by Companies House such as Best Formations. Electronic incorporation can cost as little as £15 including £10 Companies House electronic registration fee. Many UK company formation agents can also offer other services which are very useful for different type of businesses such as registered office address service, service address for company officers, secretarial services, mail forwarding and banking introduction services. There is no legal requirement to come to the UK in order to deliver documents or present official identification documents and majority of companies are usually registered on the same day when using electronic incorporation systems.
Information required to register a private limited company (for both electronic and paper form applications): Company name, Registered Office Address, Directors (at least one director who is a physical person is required to form a limited company), Service Address for company officers (directors, secretary, shareholders), People with Significant Control, Shareholders, Standard Industry Classification Code (SIC).