Limited company formation is the process of incorporating a business at Companies House in the structure of a limited company.
Upon incorporation, a private limited company becomes a separate legal entity; an ‘individual’ that is completely distinct from its owners and responsible for its own finances, assets and liabilities.
If a company becomes insolvent, the owners (shareholders or guarantors) cannot be held personally liable for debts or claims beyond the amount they have invested in shares or committed to pay in guarantees (except in rare cases such as fraud).
This financial protection is known as ‘limited liability’ and it is one of the foremost reasons for choosing to operate as a limited company rather than a sole proprietorship.
Sole traders do not enjoy the financial protection of limited liability. There is no distinction between their business finances and personal finances. This means they have unlimited liability and are wholly liable for all business debts and claims.
Once incorporated, companies must adhere to strict accounting practices and reporting requirements in accordance with the Companies Act 2006. All corporate details are placed on public record to ensure full disclosure and transparency for the benefit of the public.
Four Steps to Company Formation
1. Choose a company name:
Make it special! Choosing a company name is a very important part of forming your business. There are numerous tools online, including the official Companies House name searcher (available here) Results are instantaneous so you will find out immediately if it’s available, if you need to make adjustments, or if you have to provide documentation to support the inclusion of any ‘sensitive’ words or expressions.
2. Select a company formation package:
We offer a wide selection of formation packages with varying levels of support- our team will be happy to talk you through your options!
3. Complete the Application Process:
One of our team will be on hand to collect all the information we require for your application. Once we have assessed your business, we will determine the following information before submitting:
- Company name.
- Registered office address.
- Description of main business activities (SIC code).
- Director’s details (minimum of one, must be least 16 years old).
- Shareholder’s or guarantor’s details (minimum of one)
- Secretary details (optional).
- Information about People with Significant Control.
- Memorandum and articles of association.
- Statement of capital (this outlines the share capital of a company limited by shares).
4. Submit your online application to Companies House:
We will check your company formation application before sending it to Companies House. They will process your application within approximately 3-6 working hours (weekends excluded) and you will be notified as soon as it’s approved.
You will receive a confirmation email containing digital copies of share certificates (if applicable), a certificate of incorporation, and the memorandum and articles of association. You can download and print these documents any time you wish. If your company formation package includes paper incorporation documents, we will post these out to you within 24-48 hours.
How many people are required to form a limited company?
Whilst you must have a minimum of one director (officer) and one shareholder/guarantor (member), it is entirely possible for one person to assume both roles and incorporate on their own. This is extremely convenient for many people, particularly sole traders who wish to retain complete ownership and full control of their business.
It’s also a great option if you just don’t like working with other people. Alternatively, you may appoint multiple directors and members during and after company formation.
How long does it take to incorporate a private limited company?
Most are incorporated online through a company formation agent because it’s the easiest and quickest option. Generally, it takes no longer than 3-6 working hours for Companies House to approve these applications. Your company will then be ready to trade as soon as this happens.
Let’s Get Started
Are you ready to start building your future with Kanyatech? Get in touch with our experienced team today, and find out how we can help you start your new business the right way!
Not only will we get your company incorporated, we can also take care of the essentials, like email address setup, domain registry, website and software development, and even provide limited financial services. Contact us today!