Company formation in the UK has become relatively simple over the past few years. Previously it would involve a heavy load of paperwork and either, an astute legal brain or the presence of a solicitor, to fully negotiate it. However, upon the emergence of several Internet based companies, designed to aid in the formation of new businesses, it is now a great deal easier.Company formation can occur for a whole number of reasons. It mainly happens when an individual would like to separate themselves from their line of self-employment. By setting a private company, they reduce the risk involved and make things a lot more official.
How to form a company
The process of company formation relies on the completion of a few mandatory documents. These can be a bit of a pain in the neck, especially if you are setting a small company, however unfortunately you cannot move forward until they are completed. If you are setting up your company online, then invariably the provider will take care of all of these issues, however if you’re attempting to deal with the procedure yourself then you will need to investigate the following aspects.
The first thing you will need to decide is the type of company you are looking to register. The main types of company are:
- Private Limited Company
- Private Unlimited Company
- Limited Liability Partnership
- Public Limited Company
Memorandum of association
This is the fist document to tackle and arguably the most important. The memorandum of association sets out all of the fundamentals in your new company. These can include; your company name, the location of you home office, the directors or the liable parties. This then must be signed by all subscribers, validating the mentioned document.
Articles of association
This document sets out the regulating conditions as well as setting out the governance of the company and internal affairs. The articles of association vary slightly, depending on which type of company you are starting, e.g. private or public company.
This is the form that details all of the information regarding the company’s directors. In the event of misconduct or legal action the major shareholders or directors will need to be contacted, so this needs to be recorded in some format. These details are pretty standard for the process; DOB, passport number, home address, office address, NI number etc. They must also submit any directorships that they have held during the past five years.
For more information on:
- Form 12
- Choosing a name
- The cost of starting up