... doesnt forming
a limited company cost several hundred pounds ?
There is a myth about company formations (also called a company
registration) that it costs a lot and needs accountants or solicitors
to do it. It is possible to do it yourself by post with Companies
House for as little as £20, plus associated costs of aproximately
another £25.
Companies House (the official organisation that controls
the registration of UK mainland limited companies) charges
£20, so there is no way of doing FREE company registrations.
You then need the "rules and regulations" for
the company. For a general commercial company, these are
called the "Memorandum of Association" and the
"Articles of Association". Good office supply
stores can provide a standard set for around £15 to
£20. Finally, if doing it yourself, by post, you will
need to obtain the services of a solicitor or other notary
to witness your signatures. They may charge for this. This
method of formation is the absolute minimum cost for doing
it completely on your own. Companies House will send you a "Certificate
of Incorporation" through the post after about 2 weeks
and you have to keep copies of the Memorandum and Articles
that you sent to Companies House.
Many accountants also provide a formation service - in fact,
we have many accountants that use our services to form companies
for their clients, but if you had enough computer and internet
skills to get to this website you can form a company just
as easily yourself and, with the speed of the internet,
you can do it the same day !
So, whats involved in a company formation
? Firstly you need to know that there are several forms of company,
the main ones being:
Note that being a sole trader is not
a "company" it is just a business that a person can
run.
A "normal" commercial company is
a company which is Limited by shares (i.e. the first option
above). This is by far the most common type of company formed.
If you will be operating as a general commercial company
through the buying and selling of products, services etc,
then this is the type of company you will most likely need.
The Limited by guarantee option is for clubs, associations, and charities and does not allow you to operate your business for profit.
When you start up a new commercial company, the
company you create is like another person. It can own property,
it can buy and sell goods etc. The people who own the company
are called shareholders because they hold a share in the company.
The people who run the day to day business of the company are
called directors, and the person responsible for ensuring all
the legal filing is done every year (amongst other things) is
called the Company Secretary. To form a UK limited liability company
you need to have at least 2 people involved in the company.
Click below to go to our website for forming your limited liabilty
company online
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