If you have decided to trade as a limited company, there are some steps you need to take in order to officially register it. If you’ve never done this before, it can feel like a challenging task.
The good news is, it’s not as tricky as it seems. To help you navigate the process, we’ve put together a guide that will cover the following:
- How to register a limited company
- How you can keep your company finances in good shape from day one with Countingup
How to register a limited company
Before you dive straight in at the deep end and submit an application, there are a few details that you need to take into consideration. By thinking about these upfront, the process will be much quicker and easier.
- Choose your company name
This is the first hurdle you may encounter when putting together your business plan since there are some strict rules that your company name must adhere to.
You won’t be able to use the same name as another registered company, or one that’s too similar. It’s therefore worth taking some time to research this, either by visiting the Intellectual Property Office (IPO) page or checking out the Companies House register. By doing this you can see what other names have already been registered as trademarks in the UK.
The rules on this are strict, so it’s best to avoid similar names completely, even if they’re written differently. For example, a name like ‘Easy Plumbing Today Ltd’ is going to sound the same as ‘EZ Plumbing 2Day Ltd’ and wouldn’t be approved.
Once you’ve come up with a unique name, you’ll also need to check that it doesn’t contain the following:
- Misleading words: Words such as Chartered, English, Royal or ones that imply qualifications that you don’t have.
- Offensive words: You cannot include a ‘sensitive’ word or expression.
- Words that suggest a connection with government or local authorities: You must have permission for this.
Whatever name you decide on, you must include ‘limited’ or ‘ltd’ at the end.
Still not sure whether your company name will be approved? Take a look at the gov.uk website.
- Appoint your company officers
Every limited company needs at least one company officer, who takes responsibility for the business. However, the rules change slightly depending on whether you’re a public or private limited company.
- Public: You will need a minimum of two directors and a company secretary in addition to your company officer.
- Private: You will need a company officer and at least one director.
Both types of limited company must also include at least one shareholder, and you may also need to report any other people with significant control (PSC) to Companies House. A PSC is someone who meets the following criteria:
- They own more than 25% of the company’s shares
- They have over 25% of the company’s voting rights
- They can remove or appoint the majority of the company’s board of directors
- Decide on a registered business address
This step is extremely important as it’s where all of your official correspondence will be sent from HMRC and Companies House. If you don’t have a commercial property, you can register your home address, but bear in mind that this will be publicly available on the Companies House register.
An alternative to this, if you don’t feel comfortable using your home address, is to use a post office box (PO box) for any important letters. However, if you think this is the right option for you, you’ll need to ensure that it’s set up before you attempt to register your company. This is because you’ll need to provide an address (in the same UK country you’re operating in) with a postcode.
- Finalise any required documents
There are two documents that you’ll need to submit to Companies House before you can begin trading:
- Memorandum of Association: This document needs to be signed by all shareholders since it confirms their agreement to form your limited company. Because of this, they will also need to own at least one share in the business.
If you’re registering your limited company online, then this document will already be included as part of the process. However, if you choose to register by post, you’ll need to submit this as a separate document.
Once you submit a Memorandum of Association, it can’t be changed, so spend some time ensuring it’s accurate.
- Articles of Association: In essence, these are the ‘rules’ about running the company. All directors, shareholders, guarantors and company secretaries must read and sign this document.
If you’re unsure on how to put an article of association together, the UK Government website has some model articles here, which are applicable to most business types. If you believe you may need a more specific document, it’s best to seek legal advice.
- Register your company
Now you’ve organised all the important details, it’s time to officially register your company. There are two routes that business owners usually take:
- Self-registration: You can register your own business via Companies House; it usually takes around 24 hours to become official and costs £12.
- Using a company formation agent or solicitor: Although this option costs more, a specialist will be on-hand to guide you through the process and handle the paperwork. Plus, once your registration is submitted, it could take as little as three hours to become official.
Looking for an agent? Take a look at the Companies House formation agents directory.
How you can manage your company finances with Countingup
Bookkeeping and tax admin can be stressful, especially if you’ve never done it before. That’s where Countingup comes in. The app offers a business current account complete with free built-in accounting software.
Countingup automates the time-consuming aspects of your financial admin, so you can focus on getting your business up and running. And the best part? It can all be done in the palm of your hand with the Countingup app.
Find out more here.