You have an idea and you’re ready to commit yourself to having a good go at starting a new business. Now, if this is all new to you, it can be very daunting, but if you make sure you get everything set up correctly from the start, this can be one less worry in the long run.
Pick a name for your business
The first part should be easy, think of a name for new venture. Check to see if the name you like is available using the link below.
Company name availability checker
For obvious reasons, there are certain words Companies House won’t allow, so keep it clean! You also need to make sure your company name doesn’t include any words on the list below.
Agree who will be the shareholders of the business
A shareholder of the business is someone who owns a percentage of that company. You can have one shareholder owning all the shares, meaning they own 100% of the business, or you can have four shareholders owning 25% each.
The percentages can be split anyway you like, but make sure you have enough shares available to make the ownership percentages work. This will be based on the number of issued shares which Companies House will ask you for during the setting up process, together with the nominal value of each share.
Agree who will be the directors of the business
If you have more than one shareholder, it doesn’t mean you all have to be directors. However, Directors are the decision makers and have certain responsibilities to ensure the company is kept on the right side of the law (e.g. ensuring the company accounts show a true and fair view of the business and the appropriate forms a submitted to HMRC).
Who is a person with significant control?
Companies House now requires you to identify the people with significant control, which is referred to as a PSC. A PSC is likely to be people who have the following;
- more than 25 per cent of shares in the company
- more than 25 per cent of voting rights in the company
- the right to appoint or remove the majority of the board of directors
Prepare your memorandum and articles of association
These are documents that detail how you are going to run your new limited company.
The memorandum of association is the legal document that all your new shareholders sign when agreeing to form the company. You’ll receive this automatically when you register your new company.
The articles of association are the rules about how you’re going to run your new company, which is agreed on by the directors and shareholders. You can find a template for this below.
Model articles of association for limited companies
Incorporate your new company!
You’re now ready to incorporate you new company, which can be done using the Company House website. They will charge you a small fee for this (around £12) and in return you will receive an incorporation certificate. Keep this safe as you will need this when setting up a bank account for your new company.
You will also be asked to provide a SIC code, which identifies what your company does. These can be found on the link below.
Click here if you would like to speak to one of the team.
