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Incorporating a Company

Incorporating a Company

What is a limited company

A registered company is a legal entity with a separate identity from those who own or operate it. Most companies are limited liability companies which mean the liability of the members is limited by shares or by guarantee.

Who can form a company?

One or more persons can form a company for any lawful purpose by subscribing their name(s) to the memorandum of association and complying with the legal requirements for incorporation. In law, 'person' includes individuals, companies and other corporations. Those persons who subscribe their names to the memorandum of association are known as "subscribers".

Is there more than one type of company?

Brighton Company Formations can assist in the incorporation of the following types of company:

  • Private company limited by shares: This type of company has a share capital and the liability of each member is limited to the amount, if any, unpaid on their shares. A private company cannot offer its shares for sale to the general public.
  • Private company limited by guarantee: This type of company does not have a share capital and its members are guarantors rather than shareholders. A company is limited by guarantee if the member's liability is limited to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up. The amount of the guarantee is often limited to ten pounds.
  • Public limited company: This type of company has a share capital and limits the liability of each member to the amount unpaid on their shares. In order to start trading a trading certificate must be obtained which will confirm that it has a minimum allotted share capital of £50,000.
  • Community Interest companies (CICs) can be incorporated as private or public companies. Private companies also include Right to Manage Companies and Residents Associations.
How do I form a company?

Brighton Company Formations can assist you in the incorporation of your new company. We offer a free name checking facility and a range of packages at various prices. Please feel free to contact us.

Can I reserve the name once I have checked that it is available?

You cannot reserve a name.

What is the memorandum of association?

The memorandum of association of a company incorporated under the Companies Act 2006 confirms the subscriber's intention to form a company and become members of that company on formation. In the case of a company that is to be limited by shares, the memorandum will also provide evidence of the members' agreement to take at least one share each in the company.

From 1st October 2006 information on capital and shareholdings is no longer part of the memorandum and this information will be contained in a ‘statement of capital and shareholdings' or for companies limited by guarantee a ‘statement of guarantee'.

Once the company has been incorporated, the memorandum will no longer affect the ongoing operation of the company and it cannot be amended and it will become a historical document.

What are articles of association?

A company's articles of association are its internal rulebook. Every company formed under the Companies Act 2006 or earlier Acts will have articles of association – commonly referred to simply as the company's "articles".

The articles are chosen by the members and form a contract between the company and its members. They help to ensure the company's business runs as smoothly and efficiently as possible and will set out how the company will make decisions and include various matters connected with the shares.

Every company is required to have articles by law and the articles are legally binding on the company and all of its members.

The articles cannot contain rules that are against the law.

What happens if I change my articles after incorporation?

Once your company is incorporated, you must notify Companies House every time your company makes changes to its articles. You and your company may commit an offence if you do not do so. A copy of the special resolution making the change must be delivered to Companies House within 15 days of being passed. You must also deliver a copy of the amended articles to Companies House within 15 days. Brighton Company Formations can assist you with the adoption of new articles and provide you with bound copies of the new articles.

What are entrenched or restricted articles?

Your company can choose to adopt articles which include provisions that are entrenched, meaning that the company can only repeal or amend these provisions if certain conditions are met. For example, the articles may contain a rule which could only be changed with the support of a higher majority of shareholders than would be required to pass a special resolution.

What is the registered office?

By law every company must have a registered office. The registered office must be a real address, i.e. a physical location where it is possible for the company to accept service of documents. However the registered office need not be a place where the company carries on its day-to-day business. Brighton Company Formations offers a registered office facility which is popular with home workers, for example.

The directors are responsible for ensuring their registered office is effective in terms of dealing with all notices, letters and reminders sent by Companies House or other organisations, businesses or individuals. For example, you could receive a legal demand from a creditor and you will need to respond promptly to avoid further action.

If any person you deal with in the course of your business requests in writing the address of your registered office, or the location where they can inspect your company records, or details of the records that you keep at your registered office, you must respond within five working days. If, after registration, you decide to change your registered office address, you must file a 'Change of registered office address' (Form AD01). The new address must be in the same part of the United Kingdom as the previous address. The change of registered office is not effective until registered at Companies House.

It is not possible to change the country of incorporation once the company is incorporated. Therefore if the company is registered in England and Wales, its registered office must always be in England and Wales. If the company is registered in Scotland its registered office must be in Scotland and if the company is registered in Northern Ireland, the registered office must always be in Northern Ireland. Similarly if the company is registered in Wales the registered office must always be in Wales.

What is the certificate of incorporation?

The certificate is conclusive evidence that the requirements of the Companies Act 2006 as to registration have been complied with and that the company is duly registered under this Act. The certificate will state:

  • the name and registered number of the company;
  • the date of its incorporation;
  • whether it is a limited or unlimited company, and if it is limited whether it is limited by shares or limited by guarantee;
  • whether it is a private or a public company; and
  • whether the company's registered office is situated in England and Wales, Wales, Scotland or in Northern Ireland.

The certificate must be signed by the registrar or authenticated by the registrar's official seal.

Start by searching for your company name.