How To Register A Company In The United Kingdom
Introduction
The aim of every entrepreneur is to not only make great profits but also be recognized globally. Setting up companies in other countries is a great way to start. Not only is it profitable, you also stand a chance of gaining a larger target market. Research has shown that the United Kingdom falls among the top countries with the largest business formation growth.
How to Register a Company In The United Kingdom
1. Choose a company structure.
The first step in registering a company is to decide on a suitable business structure. Most entrepreneurs who wish to register their company in the United Kingdom option for what is referred to as a Private Limited Company. The limited company is simply a company limited by shares or limited by guarantee. What does this mean?
Limited by shares companies are usually businesses that were opened for profit making. This simply means
- The company has separate finances from your personal one, which means you don’t lose any of your personal finances if the company goes bankrupt.
- The company has shares and shareholders.
- The company can keep any profits made.
Limited by guarantee companies are usually businesses that do not make profits. This means that
- The company has separate finances from your personal one.
- The company has guarantors and a guaranteed amount
- The company invests profits it made back into the company.
Business owners need to choose the type of company they want to establish before registering the company. The type of company should be considered depending on the nature of the business, partners and the area of operation.
2. Choose a company name.
Your company name is the first thing people learn about your business. Before registering a company in the United Kingdom, you need to check to ensure that your company name is available. Choosing a company name takes proper consideration because it is what your company will be recognized by, in the business world.
Here are some tips in helping you when selecting a company name
- The kind of market you are going into. Always keep in mind the product you are into before selecting your company name. Your company name should be able to give your customers an insight into what you are selling to them
- Keep the name short. This is so important when choosing a name. This helps with marketing, customer service and referral. Having a simple but yet catchy company name makes it easier to remember and gives a little bit of style to your products.
- Pick a meaningful name. When choosing a company name, try as much as possible to keep your products as your major focus. Your company name should not only be your landmark but it should be able to help sell your products to the society.
- Avoid company names that are hard to spell. The name should not only be easy to remember but also be easy to write down. It should also be easy to pronounce. .That way, advertising and marketing would be much easier.
3. Choose/ Appoint the directors.
Having at least one shareholder who will be tasked with carrying out the company’s affairs is necessary before company registration. The shareholder can as well stand in as a director of the company. Appointing also essential key management executives such as company secretary (mandatory), compliance officer, etc.
The duties or responsibilities of the company director of the company are:
- Follow the company rules and regulations.
- Promote the success of the company.
- The company director must be able to exercise independent judgment.
- The director can be seen as the agent of the company appointed to manage the company’s day-to-day activities
- The director can also be a stakeholder or even an employee and has to be able to balance both jobs at the same time.
- The director is responsible for the strategic and operational decisions of the company and also makes sure that the company meets its statutory requirements.
Also bear in mind that before appointing a director, the size of the company, the type of business the company deals with, the growth phase, professional skills, experience, etc, should be taken into consideration.
4. Identify people with significant control (PSC)
The PSC are those who have significant control over the company. They are the shareholders and the directors. Deciding who becomes a PSC is very simple. Anyone who has more than 25% of the shares of the company can become a PSC, and also those who have more than 25% voting rights in the company.
However, details of the company PSCs must be recorded and included in the company registration form. Also, any changes to your PSCs information must also be recorded in the company registration form.
5. Prepare the required documents.
The following documents are required for company registration in the UK.
- A Memorandum of Association is a legal document prepared during the registration of the company. It helps define the relationship of the company with its shareholders and also outlines the objectives for which the company is formed. The company can only undertake the activities listed in the MoA. The MoA must be signed by at least two subscribers in the case of a private limited company.
- Articles of Association. This lays down the rules and regulations for the internal management of the company. It brings clarity to the relationship between the company and the shareholders as well as within the shareholders. The AoA also contains rules regarding voting rights, the appointment of directors share capital, and so on.
- Valid passport and Visa. To register a company in the UK, you must not necessarily be citizen as it is open to all. But having a valid passport and visa are required to register your company.
- Details of the company shareholders. This should be included in the company registration form having information regarding the shareholders like name, age, address, and so on.
- Details of the company PSCs should also be included in the company registration form. Information like Names, addresses, voting rights and so on should be mentioned.
- Details of the company-registered address should also be provided.
- Address proof and ID proof should also be provided.
- UK bank account details.
6. Apply for company registration.
To apply for a company registration, you need to choose a Standard Industrial Classification of economic activities (SIC) code for the company. This indicates the activities carried out in the company
You should apply for company registration with the Company House online (https://www.gov.uk/topic/company-registration-filing/starting-company) or offline through post or an agent. When your company has been successfully registered, it will receive a ‘Certificate of Incorporation which states that the company legally exists and it comes with the company name and its formation date.
Conclusion
Starting up a company in the United Kingdom benefits entrepreneurs because of its high technology and government encouragement. The registration process is quick and it requires at least one shareholder to start. Also, the executive staff do not have to be a citizen of the UK.
FAQs
-Can a foreigner register a company in the UK?
Yes, pretty much anyone can start a business in the UK. You don’t need a residental status but the company must be registered to a UK address.
-How much does it cost to self register a company in the UK?
It ranges from £12 up to £40, depending on the method of registration you choose
-What are the options for registering a business in the UK?
1. Register online.
2. Register by post or an agent.
While registering online is the easiest way, registering by post requires you to print out and complete form 1No1 and send to Companies House which cost £40 and takes longer time.
3. Register via a third party.