If you run a business in the UK, the chances are, at some point along your business journey you will go through the process of incorporating a company.
What is an incorporated company?
Company incorporation means formally turning your business into a company, recognised by the government as a separate legal entity from the people who founded the business. According to the Companies Act 2006, you cannot operate a business as a company until you have registered with Companies House.
If you are unsure of whether you should incorporate your business into a registered company, it might be worth speaking to an accountant or solicitor who can give you legal advice on the status of your business. At Profile we can help advise on this, and if this blog post doesn’t help clarify enough, we’d be happy to take your call and chat through the process in person.
If you are at the stage where you know you want to go ahead with incorporating a company, here is a simple checklist of steps you will need to take.
Choose the type of company you wish to register as
Companies House states there are four different types of incorporated companies. These are; a private company limited by shares, a private company limited by guarantee, a private unlimited company, and a public limited company.
The difference between the four different types of company can seem a little daunting but it comes down to the decision on whether you want to have members or shareholders, and how much liability the members have if the company closes.
Documents You’ll Need to Prepare Before Incorporation
You will need a number of documents prepared before you actually go through the incorporation of your company. Your documents will need to include a proposed company name, registered company address, name and residential address of directors as well as details of shareholders or members.
The most important documents are the Memorandum of Association which is a legal statement of the company signed by the directors and all shareholders or members, and the Articles of Association, which sets out the aims and purpose of your company including details of how it will operate, and the company rules as agreed by the shareholders and directors.
Alongside these two documents you will need the required application form, the required fee (details below), and any other additional information.
Ways to incorporate your company
There are three ways to actually submit your application for UK company incorporation. The quickest way is to use a company who has electronic software and is an approved partner company with Companies House. Using their electronic software means your company could be incorporated within 24 hours and costs only £10 to submit (although there may be additional fees to using a third party company’s services).
You can also submit an application online using the Gov.uk website for just £12 – however, at the moment their online services only allow you to submit an application for a private company limited by shares. If you want to register for a different type of company, then the third method might be the best option for you.
The third way to apply for company incorporation is to submit a paper application through the post. The cost here is a little higher than the other options, at £40, but it does mean that you don’t incur any costs from third party companies.
Post-Application and Certificate of Incorporation
After your application has been submitted, Companies House will look at your application and perform a number of checks to ensure that you are eligible to register a company for incorporation. Should all of the checks come back okay, then Companies House will incorporate the company and issue a certificate of incorporation.
Once you receive your certificate you are then free to begin operating as your company. Remember though, you will need to submit documents annually to Companies House, such as annual accounts and a confirmation statement which confirms details such as the registered address, directors’ details and shareholder information. You will also have to register the company for various taxes and submit the returns to HMRC at the appropriate times during the year. This is something that we at Profile is more than happy to help you out with so do get in touch if you wish to discuss or have any queries.