Company Formation

What is a Limited Company?

Formation, Setup or Incorporation of a Limited Company is a procedure by which that Company and its name are registered at Companies House and become legal entities belonging to its shareholders. This setup process is commonly known as company formation, company incorporation or company registration. We specialise and have many years experience in the setup of Limited Companies.

The Limited Company's Shareholders are its owners, and that Limited Company is controlled and administered by its Directors and Company Secretary (its Officers). Whilst the Officers are very often Shareholders, they need not be.

The Companies Act 1985 and subsequent legislation declares that a private limited company can be formed for any lawful reason, subject to the following requirements:

• It has a Registered Office address within the UK
   

• A minimum of two persons act as Officers
  (i.e. there is at least 1 Director as well as a Company Secretary. If the Company Secretary is also a Director, then an additional Director has to be appointed to fulfil this 'two persons' rule).
   

• At least 1 share has to be issued upon incorporation, and that shareholder (the Subscriber) is listed in the Limited Company's Memorandum & Articles of Association

Features of a Limited Company

A private UK Limited Company is considered as one of the most easily managed and cost effective business structures.

Some of its outstanding features are:

• No specific qualification requirement for the company secretary, directors or shareholders
  
  No nationality or residence restrictions for the company secretary, directors or shareholders
   

• A private limited company can have just one director who may also be the only share holder.
   

• A private limited company can start trading immediately upon incorporation if it has the correct documentation issued by us on behalf of Companies House.

Advantages of a Limited Company

A private limited company has its own legal existence. This means that assets can be owned by the company itself rather that the founders, and all contracts signed on its behalf. The directors and secretary are employees of the Limited Company and only act as agents. Therefore a limited company exists outside of the resignation, bankruptcy or death of a director. The limited company can be dissolved only by winding up, liquidation or order of the Registrar of Companies or by the Court. Major advantages of a UK Limited Company are:

• The limited liability it offers its owners. Should things go wrong, the owner's (or shareholder's) liability is limited to the nominal value of the shares held by them. In other words, the personal assets of a shareholder are protected from any debts of the Limited Company.
   

• Incorporation as a limited company protects the selected company name. Once incorporated, it is listed in the register of companies maintained by Companies House, and no one else can incorporate using this name.
   

• Tax benefits can also apply. As employees, the directors of the company are required to pay Income Tax on the amount they pay themselves, but the company pays Corporation Tax on the company profits remaining, which often averages out much less than if personal Income Tax were paid on the same amount.
   

• It is easy to transfer interest in a business through the ownership of shares.
   

• A private limited company also offers improved national insurance benefits.

Limited Company Formation or Incorporation Procedure

Solent Finance and our agents, are approved registrars and have completely automated the company incorporation procedure. You can now form your company online, with no solicitors needed or documents to sign.

Using our electronic company formation services, the entire company setup procedure is completed within a day, and for a reduced cost compared to the old paper route.  

Solent Finances Standard company formation package includes the following:

• Certificate of Incorporation

• Full Memorandum & Articles of Association

• Share Certificates

• Company Register

• All the documents you must keep 'available for inspection'  when trading

Brief Glossary of Terms

Some of the terminology used by Companies House is a little confusing, so hear are the meanings of some of the more often used descriptions: