Regardless of the size of your organization, if you’re planning for company incorporation in London, it is quintessential that you abide by the necessary formalities and statutory compliance requirements. The vast array of documents needed to incorporate your company is often considered overwhelming and complex, which is why Zegal has created this article and a plethora of accompanying resources curated by our experienced team of industry professionals to ensure that this process is executed as smoothly and hassle-free as possible. This article provides an overview of the most common filings related to incorporating a company and is not intended for use within more complex transactions. In such cases, please consult our team of specialists for bespoke advice.

How do you incorporate a company in the UK?

Company incorporation is when a new or existing company registers itself at the Companies House as a limited company, thus distinguishing its legal entity as a company with the individuals who own or hold shares in it. Renowned for fostering a strong investment environment and pro-enterprise culture, the UK has become one of the prime locations for businesses to trade because of how efficient and easy it can be if done correctly. Below are the essential considerations that must be made when incorporating your company, as well as the documents that need to be completed and issued to the Registrar of Companies.

Before Filing a Registration Form: Company Incorporation London

Prior to incorporating your company, ensure that you have the following documents accessible:

The Memorandum of Association which confirms an intention to form the company;
The Articles of Association is a key constitutional document outlining comprehensive details regarding various company operations agreed on by its members. This document typically dictates different protocols such as how decisions should be made by members and directors of the company, how shares are distributed, the appointment and powers of directors, and so on. These principles subsequently allow the company to function as efficiently as possible while maintaining a high level of accountability between various powers. A company’s articles can either be adopted from the Companies Act’s Model Articles or craft their own Bespoke Articles.

Additionally, in order to be incorporated, your private limited company must have a physical address based in the UK where official communications and other correspondence from organizations such as the Companies House and HM Revenue and Customs are sent to. This address will become publicly available on your company’s online register and should also be displayed on emails and websites.

Your company must have a list of First Officers and should clarify the remit of their relevant powers within the company. The First Officers consist of the following:

Directors, who are at least 16 years of age whose names and residential addresses must be registered at the Companies House. A Single Alternative Inspection Location (SAIL) can also be used to avoid submitting directors’ personal addresses on the public record.
Company Secretary whose administrative functions and duties are typically outlined within the company’s Articles of Association.

It is advised that your company also prepares a Statement of Capital clarifying the company’s share structure and value. Moreover, the company’s Articles of Association should elaborate on the different classes of shares offered by the company and the respective rights alongside them, such as voting rights, dividend rights, capital rights, and redemption rights.

Complete Incorporation Formalities

The first vital component of incorporating your company in the UK is completing an IN01 Application form which can be downloaded and signed here. After this form is completed and filed with the Companies House, a certificate of incorporation will be issued.

After you receive a receipt of incorporation through a certificate from the Companies House, you can then begin establishing other parts of your business such as applying for corporate bank accounts, finding business premises, recruiting employees, and potentially acquiring a license for your business if necessary. Our expert team at Zegal can assist you with all of these formalities to ensure that your company’s incorporation process goes as smoothly and hassle-free as possible.

What are the different types of small business structures and how do limited companies work?

Within the UK, there are four main types of business structures that you must be aware of, especially when establishing your newly incorporated start-up. The business structure you choose to adopt will have crucial implications for your business and how it is run, by determining factors such as the amount of tax you pay, the amount of personal liability you incur should the company fail, and your ability to raise finance. Therefore, choosing the appropriate business structure for your company bears significant importance.

Sole Trader: if you are a self-employed individual working for yourself, you must register your business under the sole trader business structure to HMRC. As expected, this would mean that you would be entitled to retain all the profits made by the business as income but will be liable to pay tax and national insurance by filling out a Self Assessment Tax Return. Similarly, because you are self-employed, you will be responsible for all liabilities including all personal assets and those jointly owned by another person.
Partnership: as the name suggests, a business partnership involves two or more individuals agreeing to share the risks, costs, benefits, and responsibilities of running an organization. Moreover, each partner is also liable for the other partner’s negligence or misconduct should such a situation occur. The profits or losses from a partnership will be shared between the partners.
Limited Liability Partnership: also known as an LLP, the partners’ liability within this business structure is limited to the amount they choose to invest in the business. The LLP must be registered at Companies House and with HMRC. Annual accounts also have to be prepared and filed. Shareholders of the company must submit a personal Self Assessment Tax Return every year, pay income tax on their share of the partnership’s profits and pay National Insurance to HMRC.
Limited Company: this form of business structure allows the company itself to have a distinct separate legal entity with its own right and obligations, and is owned by its shareholders and managed by directors. Possessing this separate legal entity also means that the company and not its owners are responsible for everything it does. Similarly, any profits generated are retained by the company, after it pays Corporation Tax. Only then can the profits be distributed to shareholders in the form of dividends.

Most limited companies are limited by shares, meaning that the shareholders’ responsibilities for the company’s financial liabilities are limited to the amount that they paid for their shares. Alternatively, a company limited by guarantee has members acting as guarantors and does not necessarily have share capital or shareholders.

How long does it take to register a company?

The amount of time it takes to register a company depends on how you choose to do it. Postal applications to the Companies House typically take between 8 and 10 days, while online applications can be processed just 24 hours after submitting.

How much does it cost to incorporate a company in the UK?

Under the Companies House standard online incorporation procedure, company incorporation costs £12 which can be paid using a credit or debit card. If you choose to submit your IN01 application through the post, you will be charged £40, and for a same-day formation (paper return), you’ll be charged £100. Please note that all same-day Companies House services have been temporarily suspended due to the Coronavirus outbreak.

Do you need an accountant to set up a limited company?

There is no legal requirement to appoint an accountant in order to set up a limited company, however, it is not uncommon for startups to use them in order to navigate tax registration, annual accounts, company tax returns, and other complex formalities which can be overwhelming for new startup founders. At Zegal, our expert team of industry professionals is well equipped to guide you through all stages of your business’ incorporation so that you can save your time and resources for more important matters.

What is the certificate of incorporation?

After you have submitted all the relevant documents to the Companies House and your application for incorporation has been approved, you will receive a certificate of incorporation clarifying that all requirements under the Companies Act 2006 with regard to registration have been complied with and that the company is formally registered.

Can I register a limited company and not use it?

A registered company that is not trading or engaging in business is considered ‘dormant’, It is important that in this case, you contact HMRC and inform them of your change in company status. Relevant fees may apply to a dormant company; check out our detailed article on company dormancy to find out more about how to change your company’s status.

Company incorporation takes into account a myriad of other complex decisions such as choosing a business structure, completing all the necessary documents, and navigating through the Companies House various pages. Maximize your company’s chances of success during this crucial stage of its lifecycle by consulting our team of experts who are determined to make your business prosper at all stages.

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How do you incorporate a company in the UK?