Frequently Asked Questions
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As a leading company formation agent within the UK, we have encountered a set of common queries amongst both lay persons as well as professionals in respect of company formation.
We have listed below some of these common questions and replied to them to save our clients and new visitors to our site, time and effort in raising these queries with us. Hopefully this will make your visit to our site more informative and rewarding:
Why form a limited company?
Many individuals decide to trade through a limited company for the following reasons; As a Limited company the personal assets of the shareholders and directors are not at risk should the company go out of business. Limited companies protect shareholders (owners) with limited liability which means they are protected if the company was to face receivership or a winding up petition, which would not be the case if they were acting as a sole trader or non-limited company. Therefore if a business was in financial difficulty the proprietors would be held liable for the businesses liabilities.
It can also be easier to obtain credit or funding to develop you business through a limited company rather than a sole trader. You bank manager at your local busines banking provider will discuss this with you should you choose our free bank account referral for your limited company.
Trading through a limited company allows you to register your name and therefore protect other businesses using the same name. Companies House does not allow two limited companies can have the same name, which avoids confusion when trading commences. Limited companies can remain dormant for an infinite amount of time, meaning that you are able to protect a company name. There may also be tax advantages trading through a limited company rather than a sole trader, you can also discuss this topic with your accountant.
Can I Choose Any Name I Want For My New Limited Company?
You can use any Company name that is unique. The name must end with the word 'Limited' or its abbreviation 'Ltd'. You cannot use a name that contains abusive or offensive words.
In order for your company name to be suitable enough to be registered, the Companies Act 2006, you must ensure that the name does not constitute a criminal offence, use any offensive language or suggest any affiliation with the Government or any local authority.
We suggest that if you're struggling to decide on a company name, it is best to ensure that it is descriptive of the nature of the business or the service you will provide. Ensure that it is web-friendly, and that it avoids any geographical references. If it is just you who is administering the service being provided, why not make a play on your own name?
How Many People Are Required to Form a UK Limited Company?
A UK Limited Company only requires one person. It must have at least one director who can also act as a sole shareholder. There is absolutely no limit on the number of directors or shareholders which make up the constitution of a company.
Do I Need A Company Secretary?
UK Limited by Shares Companies, or UK Limited By Guarantee Companies, or Limited Liability Partnerships (LLPs) are not required by law to have a company secretary.
Who Can Be A Company Director?
A director is a person appointed to govern and have control of the affairs of a company. You cannot be appointed director if;
- Disqualified from acting as a company director
- A person under 16 years of age
If I Am A Director, Do I have to Provide My Residential Address?
All Company Directors must provide their usual residential address. However, Directors can opt to submit a service address for the public record. Their residential address must be provided to Companies House, but this will only be available to law enforcement or licenced credit reference agencies.
What is the amount of officers needed to ensure that my company is registered?
The Companies Act 2006 prescribes that in order for a company to be legally formed and to be ongoing, you will need to have at least one director and one shareholder (who can be the same person). You will also need a registered UK office address. If you need a registered office address, then check out our 'Confidential Package' Service, in which we can arrange for your company to be registered to a virtual office address in the UK. This service can also be added to any package you choose for you new limited company.
How Many Shareholders Can A Limited Company Have?
A limited company can have an unlimited amount of shareholders. There must however be at least one shareholder, as a company cannot exist without any share capital. There is also no limit to the amount of shares one individual can hold at any time.
What is a Share?
Shares issued in a company represent ownership of a company. When an individual or company buys shares in a company, they become one of its owners. As such they are entitled to a share of the profits. Depending on the amount of shares owned can give shareholders influence in key managerial decisions.
What is the Minimum Amount of Shares That Must Be Issued?
If the company is to be owned solely by yourself then you only need one single share issued in your name to begin with. Alternatively, if you wish to distribute the value of the company amongst family members or investors or business partners, 100 shares will usually give you the flexibility required.
Please note that in the event of failure of a business, a shareholder will be responsible for any amount outstanding on shares registered in his name that are not fully paid at the date of receivership. It is also not advisable to allot large numbers of unpaid shares upon incorporation unless you know that shares will be paid for. Limited company shares provide a very flexible way of altering the ownership of companies at later stages.
Can I set up a UK Limited Company if I live outside the UK?
Yes. Any person can set up a UK limited company. It is not necessary for directors or shareholders to be resident in the UK, although your company's registered address must be in the UK. We can provide your company with a registered office address, however we will require some ID documents for each director and shareholder of the company, and information about the company itself, in order to observe the provisions of the Money Laundering Regulations.
There are a number of benefits of registering a UK company for people living in other countries:
- The cost of incorporating a company in the UK is much lower than in many other countries;
- The company can be incorporated with just one director and one shareholder
- There are no minimum capital requirements
- The process is much quicker and there is no need to use a lawyer or magistrate
How Can I Provide A UK Registered Office Address If I Live Overseas?
All registered companies within the UK must have a registered address within the UK. As part of our Confidential Package and Prestige Package deal, we will provide you with a registered office address, as part of your company formation. This allows for the service of routine paperwork and official correspondence from the authorities. Please note that this address is not to be used as your usual business address or as a service address for directors and shareholders.
What Information will I be required to provide in order to purchase the registered office address?
So that we can provide you with the registered office address, we will require further information from you so that we may comply with the UK Money Laundering Regulations. We will require the following:
- PROOF OF ID (Passport copy or both sides of a UK Driving License Card) and Residential Addresses for ALL Directors and Shareholders (or Owners) of the company and also partners of the company. We will need them for the person who purchases the service and also any persons who can expect to receive mail at the address;
- PROOF OF RESIDENTIAL ADDRESS for ALL directors and shareholders (or owners) of the company and also partners of the company. A copy of a utility bill (or Bank or Credit Card Statement) dated within the last 3 months addressed to the relevant persons at their home address is sufficient. Mobile Phone bills and Drivers Licence are not acceptable as Proof of Residential Address;
- PROOF OF COMPANY'S TRADING ADDRESS (i.e. the central location where the company's activities take place). This will be in the form of either a utility bill, bank or credit statement or premises agreement which is addressed to your company name and Trading address.
- NATURE OF THE BUSINESS
Will I Be Able to Use My Registered Office Address for Business Correspondence?
Your Registered Office Address must not be used as a general business correspondence address or named as your usual place of business. If you wish to use this address for General correspondence you will need to purchase our 'Mail Forwarding Service' product which is available at a £75.00 annual fee.
What Information Will I Be Required to Provide In Order to Complete My Company Formation?
You will need to provide the following details for every person who is to be appointed as a Director, Shareholder or Secretary of the Company in order to place your UK Limited Company Formation Order;
- Full Name (Including Middle Names - Not Initials)
- Residential Address including Post Code
- Date of Birth
- Business Occupation
- Passport or National Identity Card Number
- Telephone Number
- Town of Birth
How Long Does the Formation Process Take?
Your company incorporation will take no more than a few hours. You will receive an email confirmation that your company has been successfully incorporated once your company has been registered with Companies House. We aim to have formed your company within 3 hours, however this is subject to Companies House service levels. With Fast Track service we guarantee to have your company the same day and usually within 1 hour of your order *(orders made before 2pm).
What Responsibilities Does A Director Have After the Company Has Been Formed?
All Company Directors have a personal responsibility to ensure that the statutory documents of the Company are filed in accordance with the provisions of the Companies Act 2006 to Companies House. These include accounts and the Annual Return which is a record of the Directors and Shareholders of the Company. Changes to the Company's Directors, Shareholders or Service Addresses must also be recorded.
Directors also have a legal duty to ensure that the Company is managed correctly within the law, and they have a duty to follow the regulations set out in the Companies Act 2006. The Act expressly sets out a codification of Directors duties and responsibilities.
Does My Company Need To Be VAT Registered?
The general rule applicable to Companies in the UK that are making taxable supplies exceeding £82,000 must register for VAT. There are a few exemptions which relate the supply of produce or services themselves as they may be zero-rated for VAT purposes.
VAT is quite a complex subject in itself and we therefore recommend that you speak with an Accountant or Financial Advisor in order to ensure whether or not your Company should be registered for VAT.
Will My Company Need a Bank Account?
You will be required to have a company bank account to carry out business. However, there is no requirement that this bank account should be in the UK, or be held with a UK bank. Subject to rules of your own county, the company's bank account can be anywhere in the world. We are able to submit your details to Barclays Bank PLC who will be happy to arrange banking facilities for your company, subject to their own bank account opening processes and ID checks.
What Is An Annual Return?
An Annual Return is a snapshot of a company's composition; its directors, secretary (where applicable), its shareholders, registered office address and share capital. Every company must file an Annual Return at least once every 12 months. The Annual Return must be filed using Companies House form AR01 within 28 days of the anniversary of incorporation or of the made-up date of the last Annual Return.
For a extremely reasonable fee in the sum of £40.00, 0 Time Company Formation can prepare and file your Annual Return for you. Once you have incorporated your company, just log into your membership area of our site, select your company, and under the shop heading purchase the 'Preparation and Filing of Your Annual Return' product. We will then assist in completing this form and will file it with Companies House for you. *Please also note that the above fee does include the standard Companies House filing fee.
What If I Do Not Submit The Annual Return and Accounts of my Company to Companies House?
Companies House is entitled to prosecute directors for failing to submit documents on time. This is a criminal offence and upon conviction, directors can be fined up to £5,000.
There is a separate civil penalty imposed on the Company for late filing of Accounts. Accounts must be filed within 9 months of the financial year end.
If Companies House believes that a Company is no longer carrying on a business, they have the power to remove a company from the register. If this happens the assets of the company including its bank account and property become the property of the state.
What Is My Company's Financial Year and How Is It Determined?
Your Company's Financial Year is automatically determined to be at the end of the month in which the anniversary of the company occurs. This date can be changed within certain guidelines, but this is a complicated issue and subject to various rules and regulations.
Under the provisions of the Companies Act 2006, all UK Companies are required to maintain registers that record the details and structure of the company. These are known as statutory records and include:
- Register of Application and Allotment of Shares
- Register of Directors
- Register of Directors' Residential Addresses
- Register of Secretaries
- Register of Members (Shareholders)
- Register of Transfers of Shares
- Register of Mortgages and Charges
- Minutes of Meetings of Directors and Members
- Share Certificates
What Is Companies House?
Companies House is the UK Government Agency responsible for recording the incorporation of UK Companies, and maintaining public record information on all UK Companies. The Registrar of Companies is the chief officer of Companies House and they have the power to initiate investigations and prosecutions against Directors who commit offences against the provisions of the Companies Act 2006.
Can We Provide Nominee Directors, Shareholders and Company Secretaries?
Unfortunately we are currently unable to provide nominee Directors, Shareholders or Company Secretaries as part of our services.
Can I Change the Name of my Company after it has been formed?
As part of our on-going service to you after your company has been formed, we are able to provide a company name change service in the sum of £35.00. We will prepare the relevant certificate of change and file the same with Companies House electronically. Such orders are normally processed by Companies House within 24 hours after we have submitted the correct form to them.
How Can We Remove A Director or Company Secretary?
We also offer after your incorporation, an on-going service whereby we will remove Directors and Company Secretaries as ordered for the sum of £15.00 per officer removed. You can locate this product within the log in area of this site.
How Can We Remove A Shareholder from the Company?
In order to remove a shareholder from your company, you will need to transfer their shares over the to the existing shareholders, or to a newly appointed shareholder who may be purchasing the shares for capital. In order to carry this out, both the outgoing shareholder and the recipient of their shares will need to complete a J30 Stock Transfer Form.
We are able to assist in completing this form and filing it for the sum of £40.00. You can select and purchase this service within the client log in area of our site.
How Can I Register My Company for Applicable Taxes?
You may purchase a tax registration product from within the client log in area of our site. We recommend that you speak with an accountant or financial advisor prior to purchasing one of these products so that you can ensure that the registration for these taxes is necessary.
How Can I Close/Dissolve My Company?
If your limited company is no longer required, then the Directors can request that it be removed from the Companies House Register. To do this, you will be required to complete a DS01 form, which allows you to carry out a 'Voluntary Company Dissolution'.
We are able to provide assistance with the completion of the necessary documentation and file the same with Companies House for the very reasonable price of £50.00. This fee includes the companies house filing fee.
In order to complete this form, we must advise you that we will need over half of the directors in the company to sign the document. If the company has 2 directors then both must sign the document. It is mandatory to have at least one director in order to prepare the dissolution document.
*You should also note that a company cannot file for dissolution if:
- It has traded within the last 3 months;
- It has changed Company Name within the last 3 months;
- It is subject to legal proceedings;
- It has made a disposal for value of property or rights.