Most small business enterprises set up shop as limited companies. This happens for a number of reasons, the most prominent among these being that setting up a limited company allows a person to draw a distinct line between his personal property and that belonging to the company. This way, in case of a future liability, only the company’s finances will be affected, leaving the individual and his assets untouched.
In a limited company though the directors may be required to guarantee loans granted to the company, the shareholders of the company are not liable for the debts incurred by the company. This gives shareholders and directors a lot of financial immunity; something that is not possible if they were registered as sole traders. Thus a limited company is the basic foundation on which a business is built.
In the UK, the formation of a limited company is relatively easy. The company has to be registered with the Companies House. You can also get all important data regarding all British companies. Before registering, it is important to decide what type of registration will suit you the most. Most businesses opt for the standard limited company registration. But you may also register as a non-profit making, charity or limited partnership company. Then, you have to decide on a name of the company, and check out if the name you selected is available for use. To do this, you will have to run a name check which checks a database of every registered company at the Companies House.
The next step is to complete and submit a set of documents before you can complete the incorporation process. The Companies House has all the information regarding the forms and their numbers. You have to submit a Memorandum of Association and the Articles of Association. You also have to submit various forms like Form 10 and Form 12. These will contain important information pertaining to shareholders’ rights, physical address of your company, Directors’ powers and the name and address of Company Secretary etc.
Though you are not required by law to use an agent and you could very well do the entire process on your own, most of the times, these important documents are prepared by the company’s accountant or by formation agents. However, one of the easiest ways to register and form your limited company is through the faster online process. It is now possible for you to form your company, nominate your directors and issue shares online. This is a straightforward and fairly process. Most web services have vast experience in this field and they have an intuitive system that takes you through all the requirements. These services will send you regular email updates regarding the status of your company. Even after your company is formed, online services also allow you to alter company details like changing your registered office and share capital.