COMPANY FORMATION IN THE UNITED KINGDOM
The act of incorporating a business in the UK is known as company formation. It is also often referred to as company registration. A company or corporation is seen as a body that is secluded from the people who own the company. This is the case under the UK company law.
Formation of majority of the companies in UK is done electronically these days on the same day. Specialized agents, solicitors, or accountants, and individuals can create companies. A lot of accountants subcontract incorporation to specialized company formation agents. Below $100 is a package most agents offer for company formation. Whereas $25 is what it costs to carry out paper filing with company’s house. This fee doesn’t consist of the cost of witnessing documents neither does it include the preparation of memorandum for the company. It could take close to 4 weeks to form a company via the paper filing method.
Types of company
The following can be formed by registration at company’s house:
- Public limited company (PLC)
- Unlimited company
- Limited liability partnership (LLP)
- Limited partnership (LP)
- Community interest company
- Private company limited by shares (Ltd, Limited)
- Company limited by guarantee
- European economic interest grouping
It costs an average of $20 to set up the above type of companies in the United Kingdom.
The process of formation for limited companies
Those forming a company must submit the following documents, coupled with the registration fee, to the registrar of companies.
- Articles of association
This is regularly known as a document listing the rules for running the company’s internal affairs. Each subscriber must sign on the company’s article delivered to the registrar in the presence of a witness who must verify the signature.
- Form IN01
The intended situation of the registered company must be contained in this form. Also details of the subscribers. Statement of compliance noting that the requirements of the companies act have been complied with must also be included in the form.
- Memorandum of association
The memorandum consist the names and signatures of the individuals that would like to form the company and in the case of a company limited by shares, a commitment by the subscribers to take at least a share each. It is also advisable to make a draft of the company’s template available on the company’s house website.
In summary, memorandum of association is known as the constitution of the company laying the prospects and objectives of the company vividly, it also give meaning to its method of relation with the investor and outside world.
- Electronic process
Looking up company’s name is done by company formation agents as the have a direct links into company houses. The electronic process can be achieved using compatible software that works properly with the company’s house eFiling system. Company formation agents that have passed integration testing have their records kept in company’s house.
Once a company has been established or incorporated, companies must strictly comply to accounting practices and reporting requirements in line with the Companies Act 2006. All corporate details are place on public record to ensure transparency for the benefit of the public.