Partner Article

How you form a limited company formation

Owning a company is a fabulous experience and the effort which you put in will reap many dividends, especially as the profits which your intended company makes can be very substantial. A Sole Trader is one such company that can be formed but if you want to have a considerable workforce and issue dividends, you should form a limited company.

A limited company name has to be carefully considered

You should think about the name which a limited company will have. Unlike a Sole Trader, there are many rules and regulations which have to be abided by when thinking about the name which a limited company uses.

Firstly, you have to consult the Registrar’s Index of Company Names. Here, you can find out whether the name which you want to use for a limited company formation is permissible. Not only should a limited company have no obscene words but it cannot have any references to a governmental department. Even if a limited company will specialise in the adult industry, its name can still be found by a minor.

When the Registrar’s Index of Company Names is referred to, you will be able to find out if another company already owns it. If a name hasn’t been taken, you can use it for your limited company. However, even when you have found a name which is allowed, it still needs to be registered with Companies House.

It is imperative that you contact Companies House

A limited company can only be formed when Companies House has given authorisation. As well as telling Companies House about a limited company’s name, many documents have to be submitted.

Form IN01

A vital document in the limited company formation process, basic information is entered onto Form IN01 such as the name and address of each director and how much a company’s share value is worth.

Articles of AssociationIt is very important that accurate information is entered onto Articles of Association. This is because it details how a company will be run. Articles of Association were first introduced under the Companies Act 2006 to minimalize the administration which companies have to do. The same format which other applicants use for their Articles of Association can be sent to Companies House and you can also send a unique document as well.

Memorandum of AssociationThe names of each shareholder are entered onto a Memorandum of Association. If your shareholders intend to invest further capital in your limited company in a couple of months’ time, you need to declare this information. The number of shares which will be issued also has to be detailed. When additional shares are given to current shareholders or other people who want to invest in your company, a Memorandum of Association has to be edited and submitted to Companies House.

The cost of limited company formation

It might come as a surprise but it doesn’t cost a lot of money to form a limited company. The aforementioned documents (Form IN01, Memorandum of Association and Articles of Association) can be sent via Royal Mail and the cost of doing so is £40. However, unless you choose a Same Day delivery option, there is no guarantee that documents will arrive at all. Therefore, it is highly recommended that you form a limited company online. Not only will your documents be sent confidentially but you will only have to pay £18.

A same-day service is available when forming limited companies. When you register a company online, you will have to pay £40 and £100 when you send documents via the postal service and Companies House will process your application within twenty four hours of receiving it.

If you don’t want to form a limited company yourself because you don’t want to enter the wrong information or you aren’t confident that you will be able to do it, a Formation Agent can help.

What is a Formation Agent?

Able to assist with limited company formation, a Formation Agent is an experienced professional that has helped many people to start limited companies. Able to enter accurate information onto the aforementioned documents, a company formation can liaise with Companies House directly so that you don’t have to.

Whether you choose to register a limited company yourself or a Formation Agent does it on your behalf, it can only start to trade once Companies House has given authorisation. You shouldn’t presume that your limited company exists because only Companies House can confirm that it can start to trade. However, once this has happened, you can begin to create a brand that you’re proud of.

Author Bio

This post was brought to you www.companyformations247.co.uk. They are specialist company formation agents offering support for company formation and new business start ups.

This was posted in Bdaily's Members' News section by Tom Brown .