Limited company Formation is easier then you think and can be done very quickly. The main reason a business owner would want to form a limited company would be that the company is then seen as an independent entity. The first thing you need to consider is the structure of your limited company there are three different types.
Limited Company Formation: Types
- Private company, limited by shares: This is the standard type of company entails limited liability for the shareholders and owners.
- Private company, limited by guarantee: This is a less common type of company and is guaranteed by its members, rather than through share capital.
- Public limited company: This type of company requires that the amount to be paid on shares be borne by the shareholders and is publicly traded on the stock market.
The process of forming a limited company
There are 6 steps involved in forming your company there are providers that will do this for you but if you are going to do it all yourself these are the steps.
- Choose your name you can use companies house webcheck to see if the name is available remember this is the name you are going to have for your company and once brand is established it will be more difficult to change.
- Complete Forms 10 and 12. These can be downloaded from companies house website. If you register electronically which is going to be for all companies in the near future you do not need to submit Form 10.
- Sign these Forms and get all directors and if exists secretary’s to sign also.
- Submit the Memorandum of Association this outlines your type of business and undertakings.
- Sign and submit the Articles of Association these outline duties, shareholdings and the rights of all parties involved in the management of the business.
- Pay the fee and submit your documents.
Now that you have formed your company it does not end there. You now have to start putting in place your bookkeeping and accounting practices as you will need to file annual returns which include your accounts.
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