Incorporation is when a new or existing business, registers as a limited company. A business is a legal entity which has a separate entity from those who run or own it. Most companies are limited liability companies which means the liability of the members is limited by shares or, by guarantee.
A business cannot operate as a limited company until it has been incorporated at Companies House. This must be done under the Companies Act 2006. Doing this means the company directors are required to file documents each year such as annual accounts and a confirmation statement.
At Cooper Accounting, we can assist if you are looking to incorporate your company as a limited company and support in this process.
Who can incorporate a company?
To form a company, one or more persons need to subscribe their names to a memorandum of association. In law, a ‘person’ includes individuals, companies and other bodies. When the memorandum is completed, the subscribers confirm their agreement to form a company.
Children under 16 in law don’t have the legal capacity to enter into such a contract. The registrar won’t normally accept an application for incorporation if they are aware that the subscribers are under the age of 16.
How to incorporate a private limited company?
In the UK, to incorporate a company, you need to start an application with Companies House. This is the official registrar of companies, appointment by the UK government. No other organisation can register the same business name in the United Kingdom.
There are several steps to take in order to incorporate a company. These include:
- Check that setting up a limited company is right for you
- Choose a name
- Choose your directors and a company secretary and identify people with significant control of your company (PSC)
- Prepare documents agreeing how to run your company
- Check what records you’ll need to keep
- Register your company
The types of company
The four types of company are:
- ) Private company limited by shares: This company has a share capital and the liability of each member is limited to the amount, if any, unpaid on their shares. A private company cannot offer its shares for sale to the general public.
- Private company limited by guarantee: This company does not have a share capital and its members are guarantors, not The members’ liability is limited to the amount they agree to contribute to the company’s assets if it is wound up.
- Private unlimited company: An unlimited company may or,may not have a share capital but there is no limit to the members’ liability.
- Public limited company: A public company has a share capital and limits the liability of each member to the amount unpaid on their shares. It may offer its shares for sale to the general public and may be quoted on the stock exchange.
We appreciate that incorporating your company can seem overwhelming. With lots of information online, it quickly becomes confusing to know what to do. But, don’t worry, that’s where we are here to help.
We can help you incorporate your company so you don’t need to. If you would like support, please get in touch today for more information.