If you decide that registering a new limited company is the best way to make your entrepreneurial idea a reality, there are several steps you’ll need to take. We’ve compiled a checklist of company formation essentials for you to follow to make the process as smooth and stress-free as possible.

What does forming a company mean?

Choosing a legal structure for your new business is one of the biggest milestones when setting up a new enterprise, and it’s often the first major decision you’ll need to make.

There are several options available, but company formation describes when a business is set up and registered as a limited company. This means it becomes a separate legal entity, independent from you as the business owner in terms of finances, assets and liabilities. It literally limits the risk to your personal assets if anything goes wrong with the business.

The process of incorporating your own company includes letting Companies House know about the business so that it can be set up for Corporation Tax and the company’s information shown on public register.

Things you’ll need to register a company

Let’s go through the 10-item checklist you’ll need to work through in order to successfully form a limited company, including:

• 1. Company name
• 2. Registered business address
• 3. SIC code
• 4. Directors
• 5. Shareholders
• 6. Secretaries
• 7. Persons of Significant Control
• 8. Memorandum of Association and Articles of Association
• 9. Proof of identity
• 10. Security details

Getting everything ready in advance will help make the process easier!

1. Company name

You’ll need to give your company a name before you can get on with registering it. This isn’t necessarily as quick or easy as it sounds, because you’ll need to make sure your chosen name isn’t trademarked or already taken by any other business.

Top tip: Use HMRC’s company name checker to see if the business name you want is available for you to claim as your own without any legal ramifications.

You’ll also need to make sure whatever you choose follows the rules for naming a limited company.
 

2. Registered business address

You’ll need to provide Companies House with a registered business address as part of the formation process. This is where all legal correspondence and paper documents from HMRC will be sent, so it must be somewhere you actually have access to, or will be able to receive your post.

Some limited company owners choose to use a registered business address service, either through their accountant or via a third-party company, to keep their own residential address off the public record. Just bear in mind that your registered business address cannot be a PO Box address.

3. SIC code

A SIC (Standard Industrial Classification) code identifies the nature of your business and your intended activities.

You will be able to use the SIC code search feature to help you select the correct one, but we do recommend checking HMRC’s official SIC code list beforehand so you don’t feel pressured to make a decision on the spot.

4. Director details

The directors in a limited company have several important responsibilities, such as making sure the business complies with its record keeping and reporting duties – so it’s important that they’re up to the job! Their details will be shared on Companies House, so you’ll need to know their:

• Full legal name
• Date of birth (age 16 minimum)
• Occupation (this can simply be ‘Company Director’ if nothing else applies)
• Nationality/citizenship
• Residential address (this won’t be made public though)
• Service address (this is the address where official correspondence will be sent and it will be made public on Companies House)

5. Shareholder details

All limited companies are legally required to have at least one shareholder, although this person can also be a director. If the shareholder is a Person of Significant Control, you will need to provide the following details during the company formation application:

• Full legal name
• Date of birth
• Residence address
• Service address
• Nationality/citizenship
• Nature of control (the percentage of shares they own)

In circumstances where any shareholder isn’t a Person of Significant Control and owns less than 25% of the shares and voting rights, you will need to provide the following info for them:

• Full legal name
• Date of birth
• Residence address
• Service address
• Nationality/citizenship

Plus, three security details to use as part of their electronic signature:

• First three letters of their mother’s maiden name
• First three letters of their father’s forename
• First three letters of their town of birth

6. Secretary details (if applicable)

A company secretary is basically a dedicated person who is responsible for the administrative side of running the business. It isn’t a legal requirement to have a company secretary in a private company and many choose not to (although it is mandatory for public companies). If you do decide to appoint an official company secretary, you will need to provide the following details for them during the formation process:

• Full legal name
• Date of birth (must be at least 16 years old)
• Occupation
• Nationality/citizenship
• Residential address
• Service address

7. Info about Persons of Significant Control (PSC)

A Person of Significant Control (PSC) is somebody who:

• Owns more than 25% of the company’s shares
• Owns more than 25% of the company’s voting rights
• Has the power to appoint or remove a majority of the company’s board
• Has significant influence over company decisions

The following information will need to be provided for any Persons of Significant Control (PSC), excluding the director, shareholder or company secretary.

• Full legal name
• Date of birth
• Residential address
• Service address
• Nationality/citizenship
• Nature of control (e.g. the percentage of their shares and voting rights)

8. Memorandum of Association and Articles of Association

You will need to prepare a Memorandum of Association (MOA) and Articles of Association (AOA) when forming your company. These are basically a set of written rules agreed by the directors, shareholders, guarantors, and company secretaries, which explain how you plan to run and operate your company.

Companies House provides so called ‘model’ articles which you can tailor to your business as long as the legally required minimum is included.

9. Proof of ID

You might be required to provide proof of identification, including:

• Photo ID (such as a passport or driving licence)
• Proof of address (e.g. bank statement, utility bill)

Normally, two forms of ID are required, so having these things within reach before you begin will make your life a whole lot easier.

An example of when this might be necessary is if Anti-Money Laundering (AML) regulations are in play, which require the following people to provide proof of identity:

• Company directors
• Anybody with 25% or more of the voting shares
• The person forming the company (if they aren’t a director or shareholder)

10. Standard security details

When forming your company online, Companies House will require an electronic signature and answers to any three of the following security questions for each shareholder:

• Town of birth
• Telephone number
• National Insurance number
• Mother’s maiden name
• Father’s first name
• Passport number

Make sure you and your shareholders have the correct answers to these questions to hand so there are no delays in the application process.

How an accountant can help

If all of the information above has you feeling a little overwhelmed, don’t worry. Some people prefer to use a company formations service, or have their accountant handle it for them (it’s a service we provide as part of our wider accounting services for limited companies).

 
For more information on this and other tax matters, don’t hesitate to talk to us! Call 020 3355 4047 to learn more about our online accountancy services, or get an instant online quote.