The process of re-registering an existing company so that it becomes a limited company, starting an incorporation company in the UK is what many directors are choosing to do. The liability of the limited company which you can form is not solely the responsibility of directors because it is restricted by shares or guarantee. When a business becomes a limited company, it is also liable for tax and has to file an annual return as well.
How forming an incorporation company in the UK can be straightforward
A limited company does not exist until Companies House has given proper authorisation which is in accordance with the Companies Act 2006. If the directors at a company change at any point, Companies House has to be told straight away. Four types of limited companies can be incorporated:
- Private limited company by guarantee. Owning no share capital, the members of this company are not regarded as being shareholders but guarantors. The liability of its members is restricted to the financial sum which was personally invested. Therefore, if a private limited company by guarantee ceases trading and no longer exists, the initial figure which was invested is all that they are liable for.
- Private unlimited company. This type of company doesn’t have to offer a share capital but can choose to if they wish to do so. Member’s liability in a private unlimited company is not restricted at all.
- Public limited company. With a share capital, member’s liability is limited to the money which has yet to be paid for shares. The shares which a public limited company has can be bought by the general public and it can be listed on a Stock Exchange as well.
- Private limited company by shares. Owning a share capital, the liability which each member has is limited to the amount of money which has yet to be paid for their shares. Members of the general public cannot be offered shares under this type of company.
How you can incorporate a company
There are several ways in which a company can be incorporated in the UK:
A company can be incorporated in the UK electronically. The standard fee for incorporating a UK company online is £14. A same day service is available but this costs £30. The Web Incorporation Service also enables you to incorporate a company as well and it costs £18. However, only applications for a private limited company by shares can choose this service.
Although a company can be incorporated after filling in various forms by hand and sending them by post, there are many downsides to this process. A paper-based application is more expensive because it costs £40. For a same day application, it costs £100. However, there are exceptions which only charge £20. These include if an application to incorporate a company in Wales is made in Welsh or if an application for an unlimited company is made.
The documents which are needed for company incorporation
Just like when starting a brand new company, the same documents as before are needed. Form IN01, Articles of Association and Memorandum of Association are required and accurate information must be provided so that an application can be quickly processed. When incorporating a limited company, you should check whether it is already being used. The registrar’s index of company names confirms whether a name for a limited company has been taken or not. Therefore, when you have checked whether a limited company currently exists, your incorporation application can progress smoothly.
What should be done when a company has been incorporated?
If a company has been incorporated but has to make changes, Companies House should be notified. Such changes which Companies House need to be made aware of include if a company changes its registered address, if new directors are appointed and if further shares are awarded.
Company incorporation may require several steps in order to complete but once they have all been followed, a business can then start to trade.
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