Eight Points to Consider When Setting Up a Limited Company
Many new businesses decide to form a company right from the start. If you are forming a new company with share capital you will need to:
- Have a company name but you must check with Companies House to see if the name is available. If there an existing company with that name, then you will have to choose another one.
- Have a company address
- Decide on the share capital, who are the shareholders and how many shares each one owns. Many companies start with a share capital of £100 and have one or two shareholders. You will need to keep details of all shareholders.
- Do you need different classes of shares?
- Decide on company director(s) who are responsible for running the company. There needs to be at least one director.
- Have a Memorandum and Articles of Association. You can use templates that are available.
a) Memorandum – you can use a pro-forma to tell Companies House that each subscriber to the memorandum to association:
- Wishes to form a company under the Companies Act 2006
- Agrees to become a member of the company
- Agrees to take at least one share in the company
b) Article of Association – these set the rules that company officer must follow running their companies. Many companies use the model Articles of Association which are available online. Usually these are fine, but you may decide to tailor them for your business.
7. Keep details of the persons with significant control (PSC). This is anyone who fulfils any of these conditions:
a) owns 25% or more of the share capital or voting rights
b) can appoint or remove a majority of the board of directors
c) otherwise exercises significant influence or control
8. Decide on a Standard Industrial Classification (SIC) code which best describes the company business activity. The list of SIC codes can be found on Companies House Website.
You can set up a company through Companies House yourself, but we’re here to help if you want to discuss any of these points.