How To Go About A Limited Company Registration In The UK Properly
Registering a limited company in the UK is attractive to many people, worldwide.
It's easy to do, and you only need one person, yourself. You get a corporation registered in a stable country which lets you maintain that company fairly easily.
Someone who knows basic accounting terms and whose company's finances are simple can even file their own tax returns online from the comfort of their front room; how futuristic is that?
That doesn't mean it's like signing up to social media. If you forget about your Facebook account and leave it for a year, you won't incur fines!
UK Limited Company Registration - Tips
First, some basic do's and don'ts, for the more experienced businessman:
- Get your personal name correct.
If the name on your passport is Horace Whipplethwaite, don't put 'Harry Whipplethwaite' in the registration form.
Reason: Companies House will let that name go through (they don't check) but banks do check that field.
If the Director's name doesn't match what's on your passport and their credit referencing database, you will be denied a business bank account until you correct the name at Companies House.
That will be boring and tiresome, so don't try to be clever and use a pseudonynm; being a UK company director means you have to 'come out from the shadows' a bit.
- Double check you've spelled your company name correctly.
Mistakes can be corrected later, but it will cost money and time. More importantly, the name change will be part of your company's permanent record online and you will look like a ninny for making a dumb mistake!
- Use a real residential address as your 'Director's Residential Address'.
Companies House will do a basic check on UK addresses. If you use our address, or your office, as your residential address, they'll reject your application.
Banks can 'see' the address when they do a credit check, so your application will be rejected until it's corrected. For banks, it has to match where you actually live.
The address you submit as your Director's Residential Address will not be on the public register; only your Director's Correspondence (or Service) address.
- Want to register on a particular date? Submit the afternoon before.
Some people are superstitious or just romantic. They want a company registered on 7.7.2017. Companies House is neither; it's 'first come, first served' with them, although you can pay extra for 'same-day formation', but only if you go direct to them and do it via their website.
The downside of that if you only get the Incorporation Certificate from them i.e. the legal minimum. They don't post you smart-looking documents for your portfolio, for the admiration of friends, family and colleagues; that's not what they're about.
Save money and just submit the afternoon of the day before. (If you submit in the morning, your formation might just possibly be done the same day; Companies House staff might be on the ball that day!)
Typically, however, your company will be formed the next day. So submit in the afternoon of the day before you want your company formed.
Or just stop being sentimental! Hard work and a product people find remarkable will be much more important to your long-term success.
- Keep share amounts sensible.
A company, whose liability is limited by shares, in the UK, means that, if the company goes bust and owes creditors, shareholders are liable for the stated share values.
If your personal share-holding is 10,000 shares at £1 each, you, as a shareholder, may have to fork out £10k to the company's creditors, if your company has no assets.
So don't make up inflated shareholdings to look bigger, if you're not sure what you're doing. It's not smart.
- Have as few shareholders and directors as possible.
Do you have a good chum who listens to your guff and says he'll help you get going and put some money into the business? Try not to give him any shares.
Businessmen constantly fall out with fellow shareholders or directors. They either don't do as much work as you or they actually try something crooked. Shareholders are co-owners of your company and if it's a 50/50 split you can't do anything without their consent.
The best sort of startup has one shareholder and director: you. When you get fat and happy and drunk with money, you can make arrangements to take other people on board, after having got advice from the shrewdest and most honest accountant you can find.
Read more about limited company registration in the UK
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