1. Choose which form of limited enterprise to create
When you have decided to set up a limited company, you need to select the sort that you want to create. The two primary options are:
Private Companies Limited (LTD)
Public Companies Limited (PLC)
2. Choose the name you want
Many freelancers, contractors, start-ups and small companies may opt for a private limited company, as PLCs will have a minimum share capital of £ 50,000, with at least two owners, two directors and a qualified secretary of the company.
To most new limited companies this bit is equal parts the most fun and stressful aspect of the whole project. The business name needs to be totally original, much like a web address. To guarantee a specific name, you can distinguish in a few ways - for example, a limited company name will use either "Limited" or "Ltd." (i.e. "Crunch Limited" or "Crunch Ltd.").
3. Forming a small company
If step two was the enjoyable and relaxing part, this one is the difficult and bureaucratic part – or it is seen to be at least that. It's really easy, though, if you're organized. For Crunch, you can go online in about ten minutes and set up your own limited business, all for the cost of a pizza to take.
You only have to have some personal information to help the House of Companies recognise you as the owner of the company and you're good to go. House companies will also have your limited company established in a couple of hours.
4. Complete the incorporation process
Companies House is responsible for all UK limited company registration. Detailed information is given through their website. To complete the incorporation process the following documents must be completed and submitted to Companies House. Perhaps these will be done by your business forming representative or accountant on your behalf:
Association Memorandum-Limited company name, place, form of business
Form 10-Names of the owner, identities and address of the limited company registered
(This may not have to be where you are working from but where the HMRC and Companies House legal correspondence is sent)
Form 12-notes that the limited company fulfills the terms and conditions of the Companies Act
Articles of Association – specifies the powers of the owner, the rights of the shareholder, etc. (this is also established by the company statutes which defines the limited company).
So this is how to become a small company! Where does it take you to do next?
Okay, there are a few more pieces of admin that you can take care of and there are some annoying monitoring and filing duties that you need to keep on top of.