Having a business idea no matter how big it is does not make it legal. If you have an exceptional business you want to be run in the UK, it is paramount that you form the business legally by abiding by the rules and requirements or in other words register the business according to the stipulated laws and provisions as laid down by the UK Government. There are lots of legal and administrative systems that need to be complied with when forming a company which can be hectic and chaotic for you, but in this post, you will be made to understand easily by us breaking down the administrative steps.
There are requirements set out that must be met before you can become eligible to register your company in the UK and they are briefly explained below.
- A registered address for the company must be in the UK. This serves as the physical company for correspondence and other purposes.
- The service address of the Director is required for a Private limited company to appoint one director who needs to submit his or her address which can be anywhere.
Steps to Company Formation in the UK
With a mind-blowing business idea and plan, and have ensured that you are eligible to form a company in the UK, let us now run you through the process of setting up a company.
- Decide on the Company Structure
This is important for you to decide on because it determines the kind of necessary forms you will be required to submit which are peculiar to that kind of company. The different types of companies are;
Private Limited Company
In this type of company, the legal entity is different from the people who form and run the affairs of the company. This is the most common type of company in the UK and it only needs at least one Director and a single shareholder.
Limited Liability Partnership
At least two people are required to set up the partnership. Your liabilities as a member are limited to the amount you put in and all of the members can be involved in the running and management of the business.
This is one of the business types that is less complex to form with also minimum paperwork required. For the management of this limited partnership, one general partner has to be appointed. The general partner will be the one to run the affairs of the business and is personally responsible and liable for the debts incurred. In this type of partnership, it is not a separate legal entity so therefore the partners share liability for legal judgments against the business.
- Submission of Necessary Documents to the Companies House in the UK
After you have successfully decided on the structure you want your company to be like, the next stage for you is to embark on the incorporation with the company’s house. Every structure has documents that are required to be submitted.
- Private Limited Company (Ltd)
- Fill IN01 form along with the following information
- A unique and inoffensive Company Name,
- A Company Address in the UK,
- At least one Director with an address,
- At least one Shareholder, and
- Allocation of shares.
- Appointing a Secretary and a Person with Significant Control (PSC) is optional.
- Memorandum of Association
The purpose of this document is to ensure that in the event of any dispute which may arise, they will be governed under UK law. This document states that you intend to start a company under the Companies Act 2006.
- Article of Association
The constitution of every company is the Article of Association. This will detail the structure of the company, shares, dividends, directors, secretaries, and a host of others.
- Limited Partnership
- Fill and submit the LP5 form with the following information and submit
- A unique and inoffensive name,
- A Registered Address in the UK,
- At least one general partner,
- At least one limited partner,
- A statement that the general partner is liable for debts the business cannot pay,
- A statement that the limited partner is only liable for debts up to the amount contributed,
- The amount that each limited partner is contributing, and
- Signatures of all partners.
- Limited Liability Partnerships
- You are required to fill out and submit the LL IN01 form with the following details;
- A unique and inoffensive name,
- A Registered Address in the UK, and
- At least two designated members at all times.
After successfully carrying out the above, the next important step is for you to file your company tax returns. You can do this by registering with Her Majesty Revenue and Custom(HMRC) for the purpose of tax.
Company formation in the UK is quite a process and we have sought to break down the process for your understanding. There are more informed as to the process and procedures required for company formation in the UK.
For more information about company formation in the UK, or starting up a business in the UK and for all your business needs, advice, compliance, and legal requirements in the Middle East, Asia, and Africa please feel free to contact us for a free consultation. We are just a click away. We also assure you that we will tend to your requests.
We at eLegal consultants look forward to meeting you and are ready to journey with you to realize your dreams. Contact us today.