1. What is Incorporation?
Incorporation is the process by which a new or existing business
registers as a limited company. A company is a legal entity with a
separate identity from those who own or run it. The vast majority of
companies are limited liability companies where the liability of the
members is limited by shares or by guarantee.
A business cannot operate as a limited company until it has been
incorporated at Companies House under the Companies Act 2006.
Establishing your business as a company means the directors are required
to file certain documents every year such as annual accounts and an
annual return. They must also inform Companies House about any changes,
such as the appointment or resignation of directors or a change to the
company's registered office.
It may be worthwhile seeking professional advice from a solicitor
or accountant before deciding whether an incorporated company is the
best way for you to run your business.
2. Who can incorporate a company?
One or more persons can form a company for any lawful purpose by subscribing their names to a memorandum of association (see question 8).
In law, 'person' includes individuals, companies and other bodies. By
completing the memorandum the subscribers are confirming their agreement
to form a company.
3. Is there more than one type of company?
There are four types of company:
Private company limited by shares: This company
has a share capital and the liability of each member is limited to the
amount, if any, unpaid on their shares. A private company cannot offer
its shares for sale to the general public.
Private company limited by guarantee: This
company does not have a share capital and its members are guarantors
rather than shareholders. The members' liability is limited to the
amount they agree to contribute to the company's assets if it is wound
up.
Private unlimited company: An unlimited company may or may not have a share capital but there is no limit to the members' liability.
Public limited company: A publiccompany has a
share capital and limits the liability of each member to the amount
unpaid on their shares. It may offer its shares for sale to the general
public and may be quoted on the stock exchange. Further information
about public companies is explained in chapter 3.
4. How do I incorporate my company and what fees apply?
There are three ways to incorporate a company.
Electronic Software Filing
Electronic incorporations can be submitted electronically through
suitably enabled software. However, many incorporation agents and
software providers have developed their systems to the point where they
are able to offer customers a web-based electronic service (this is
chargeable). This means that occasional as well as regular customers can
apply for incorporation.
Many of the businesses shown on our list of software suppliers
provide web-based services and depending on the volume of filings you
anticipate making, it may be more practical for you to use their
services. You can find more information about software filing and a list
of providers on our website.
The standard fee for electronic filing is £13 (or £30 for the
'Same-Day' service for applications received by 3pm Monday to
Friday). Straightforward applications are normally processed within 24
hours.
Web Incorporation Service
Web Incorporation is the safe and reliable way to file online,
enabling you to quickly and easily incorporate your company. The
standard fee for Web Incorporation is £15. There is no same day service
and currently only applications for a private company limited by shares
adopting model articles in their entirety with a proposed non sensitive
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