How to Set up a Limited company

A limited company in the United Kingdom is a corporation whose liability is limited by law. It is a separate legal entity and can therefore sue and be sued, own property and incur debts. Once you have formed a limited company, any business dealings you make will be for the company. This means that you are only liable for the amount you have invested in the company. Forming a limited company is fairly challenging. Here’s how.

Instructions

Difficulty: Moderately Challenging

1. Decide whether you wish to form a publicly traded limited company or a privately owned one. The rest of this article shall focus on the latter.
2. Register the company. The body that deals with this is called Companies House, or the Department of Enterprise, Trade and Investment if you live in Northern Ireland. This can be done directly, with their staff providing very general guidance. It will cost £20, or £80 for a same day service. Details of how to do this can be found on their website at www.companieshouse.gov.uk.
3. Pick at least one director to manage the business, and a company secretary to maintain official records.
4. Find a UK premises from which your limited company will operate. This is where you will keep official documentation and receive official correspondence.
5. Decide on a company name. This name must not be offensive or suggest criminal activity. It cannot include sensitive words such as international or federation and must finish with the word limited.
6. Check that your chosen company name is not already registered by someone else. Search the Company Names Index at Companies House and the Trade Marks Register at the Patent Office. Names are regulated under the Business Names Act 1985 and the Company and Business Names Regulations 1981.
7. Purchase a Memorandum and Articles of Association from a legal stationer. On this you will state the nature of your company and supply the relevant information about it.
8. Fill in the Memorandum of Association. Information required includes the name of your company, the country where your registered office is located and the share capital present in the company. You must also detail the object of your company.
9. Receive confirmation of your registration from Companies House. This will normally be sent to the premises of your business.

Tips & Warnings

• It is wise to employ the services of a solicitor or online company formation organization. This will make sure the complex process is less time-consuming.
• Make sure the object of your company, included in your memorandum of association, is a wide general statement. This means you will not be limited by it should the nature of your company evolve over time.