How to set up a Company
Starting a Company
If you are thinking of setting up a company, where you may have share holders and can take on employees, then you need to register with Companies House. You need to have done your research, have put a plan together and gathered together some investment. But you also need to think about a suitable name for your company and register it before you can start making money from your business.
You need to have a separate business account to the one you use personally. This is partly because it makes it easier to keep your accounts in order and record what transactions you make through your business. It also makes it easier when you are calculating things like your self-assessment for HMRC.
Before you can make money out of your company, you must first decide on a name. Your name should be something that reflects the work that you do and the image you wish to project to your customers. Your name should not be like a name already listed on the Companies House ‘list of companies’. The name should not bear any association to existing public institutions, countries or governments without first seeking permission. See http://www.companieshouse.gov.uk/about/ for full information about which names are contested.
Registering your Company
In order to legally operate as a company, you must register your business and business name with Companies House. This is part of the Government and is responsible for businesses. Registering your company means your business will be ‘incorporated’ and your directors must release annual accounts. There are four types of company that you could register:
- Private Company Limited by Shares: A company that has a share capital. Its shares are owned by its private members
- Private Company Limited by Guarantee: A company with no share capital. Its members act as guarantors rather than share holders
- Private Unlimited Company: A company which may or may not have a share capital but does not limit their members’ liability
- Public Limited Company: A public company which has a share capital and offers shares for sale to the general public and may be listed on the stock exchange.
To incorporate your company you must file the necessary documents and send them to Companies House, these include:
- Application to register a company (form IN01) and the fee. – This is an 18 page document including your proposed business address and the names and addresses of your business director(s)
- Memorandum of association – This confirms your desire to form a company and the purpose of the company
- Articles of association (or model articles) – These are the rules and procedures which the directors will use to ensure the business runs smoothly
- Additional information if your application includes a sensitive word or phrase.
It is difficult to change these later, so it is important to check all the information carefully, and if possible seek business advice from a professional before sending the relevant documents off.
If your name and documents are approved, then you will be issued with a certificate of incorporation by Companies House. This will state the name and registered number of the company, the date of its incorporation, whether it is limited or unlimited, public or private, and whether the company’s registered office is in England and Wales, Wales, Scotland or Northern Ireland. This certificate must be signed by the registrar in order to be validated.
TCHC’s business start-up and enterprise courses are designed to support aspiring entrepreneurs with the knowledge and skills they need to set up and successfully run a business. We will help support you with your business idea and in fine-tuning your pitch to investors. It also gives you the chance to gain a nationally-accredited qualification.
If you are unemployed or have recently been made redundant, then you can also take part in our Skills Support for the Unemployed and Skills Support for Redundancy programmes. You can use the contact form below to talk to our advisers and find out how we can help you with developing your business.