5 things you need to set up a limited company

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Starting your company in the UK is easy and it contains incorporating your company as a limited company.

Why do you choose the company formation?

Company formation refers to the process of registering a business as a limited company through Companies House. Companies House is known as the official registrar of companies for the UK.

By incorporating a limited company, you will be able to turn your new business into an independent legal entity.

There are several different types of limited companies in the UK- although a company limited by shares are the most frequently used company type in the UK and the go-to choice for most businesses; however, when you reach the incorporation stage, you may find it appropriate to form a different company type.

It is not a legal requirement to set up a limited company in the UK. You are free to run the business as a sole trader. But if you choose this route, any finances or assets you own will be considered fair game in the eyes of the law, if your business goes under. That's why so many business owners choose to form a limited company and because the process of forming a company is so fast and affordable, it is an easy decision for most individuals to make.



Here is a list of 5 things you will be required before you start the company formation process.

1. Name of a company

One of the most important aspects of forming a company is choosing a company name.

There are some rules that Companies House impose about what you choose to name your company:

  • First, the name of your company should be unique. It cannot be in use by any other registered company, and it cannot be considered too similar to an existing company name. You can check if the name you would like to use is already taken.
  • Secondly, you are not permitted to use any offensive words. You are not permitted to give suggestions about the connection to the government or public authority, or any word otherwise protected.
  • Finally, your company name should be within 200 characters, and it requires to end either with the word “limited” or 'LTD'

2. Registered office address

A company's registered office address is its legal headquarters and every UK registered company must have one registered office address. This address is used for all the government's official correspondence with your company, as well as for storing your company registers ready for inspections.

  • Following are some rules surrounding the type of address you can use, including:
  • It should be in the jurisdiction (England and Wales, Scotland or Northern Ireland) in which you are forming your company. Whilst you are free to change your registered office at any point after company formation, you cannot change the jurisdiction which your company has been registered in.
  • You cannot use a PO Box number or DX number
  • It should be a physical address.

3. A service address

All company directors, subscribers, secretaries, PSC and LLP members need to give a service address while setting up a company. It is the official contact address when Companies House or HMRC need to contact you.

Rules applied to a service address is:

  • It should be a physical address
  • It can be anywhere in the UK or overseas
  • You cannot use a PO Box number or DX number
  • Your service address and registered office address can be the same
  • You are only eligible to use one service address at a time, however, you are allowed to change your service address at any time. 

4. A director

When you decide to form a limited company, you will be required to appoint at least one company director. It is the responsibility of a director to make decisions on behalf of the company and oversee day-to-day operations. Anyone is allowed to be a company director, a few restrictions are:

  • Your age should not below the age of 16
  • You cannot be the auditor of the company
  • You cannot be an undischarged bankrupt
  • You cannot be a disqualified director whose term of disqualification isn’t yet expired

5. A member

You will also need at least one shareholder (or member) i.e. someone who owns the company. The vast majority of companies are private companies limited by shares, whose purpose is to make a profit and distribute it to the owners or shareholders. 

The director and shareholder can be the same person, thus you can use the same title for both roles when you form a company on your own.

When the company is to be limited by guarantee, the members (also known as guarantors) agree to 'guarantee' a certain amount of money to pay into the company.

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