Branching out and setting up your own business is an exciting prospect, allowing you far more autonomy as to how you work daily, as well as far more control as to how you run things. However, there are a number of things you need to take into consideration when setting up a company, with different steps that you will need to follow in order correctly set up your business. TechRound explains in detail the exact things you will need to do as a business owner. It is also important to note that the process of setting up a new company differs from the process of purchasing a business already in existence.
Register with Companies House
When setting up a private limited company, one of the first things you will need to ensure that you have done is registered with Companies House. You will need to provide them with the following details such as:
- Your company’s SIC code
- You will need to have at least one director of the business
- A company name
- A physical address for the company
- You will also need to have shareholders who will agree to create the business as well as have rules written up
- Provide any details of people with significant control (known as PSCs)
Having a business name
If you are setting up a limited company, you will need to have a business name. If you are registering as a sole trader there are slightly different rules (for example, you will be able to trade under your own name, if you so wish). In reference to the former, the business will need to have a name that ends in either ‘ltd’ or ‘limited’. If there is another business operating who has the name registered, you will be unable to choose this name for your own company.
For more details as to the exact stipulations in place when it comes to what is acceptable as a name, consult the GOV.UK website which provides a detailed list.
Memorandum of association
When registering with Companies House, you will also need to provide them with a memorandum of assocation. This is a legal statement that you are obliged to have all shareholders of the company sign, which verifies their commitment to starting the business.
The GOV.UK website has memorandum of association templates available as a guide if you are unsure as to what to include. It is important to note that once this legal statement has been written, it will not be possible to make amendments to it, so consider what is included very carefully.
Articles of association
Similar to the point made above, you will also need to provide Companies House with ‘articles of association’. Again, the GOV.UK website helpfully has model articles online which you are free to use for your own company. if you do decide to write your own articles of association, you should keep in mind that will then mean that it will not be possible for you to register your limited company online. Furthermore, if you are intended to set up a community interest company (otherwise known by its acronym CIC) you will have to use specific CIC model articles rather than the standard provided.
A registered office address for your business
When registering your private limited company, you will need to make sure that the office address you have registered it to is in the UK, as all important official documentation will be sent here. When you register your business address, this will then become accessible to the public online through the Companies House Register. You also have the option of choosing a PO Box address, as well as your home address. If there is reason to believe that having your company address public could threaten you or your company (due to the controversial nature of the business, for example) you can ask to be removed from the register.
Appointing a director
As previously mentioned you will need to have one director at the very minimum for your company, as this is the person who will be legally responsible for the running of the business. It is also possible to have a company secretary who helps with some of the responsibilities involved with handling the business, but you must remember that it is still only directors who are the ones who are ultimately legally responsible for the business.