How to set up a company online (5 steps to doing it properly)
Whether you’re just starting up, or have been established a few years, there can be many benefits of setting up a registered company.
The number of companies and registrations is on the increase each year, thanks to simplified processes and lower costs of registration.
There are now nearly 4 million private limited companies registered in the UK. By following these few simple steps, you can be part of a group of business owners who are securing their business through company registration.
By the end of this article you will understand exactly how you can set up your company online.
Figure 1: Total register size of each registry, 31 March 2017
Step 1 – Decide if it’s right for your business
The first step is to figure out whether a registered company is right for your business, or whether it would be better suited to a different business structure.
Often, a business owner may be running for a few years as a sole trader before registering (or incorporating) a company. Once registered, the business;
is legally separate from the people who run it.
has separate finances from your personal ones.
can keep any profits it makes after paying tax.
Take a look at our introduction to startup business structures if you want to learn more about the different forms your business can take.
Step 2 – Naming your business
If you’ve already been trading for a few years, this may be a simple step for you. There are a handful of limitations you must be aware of, otherwise you are generally free to choose any name you like the sound of.
You can even trade under a different name from what you register your company. Your company name does however need to be different to anything already registered. Anything too similar to an existing business may face a complaint and refused registration by Companies House, the registrar for UK companies.
You can search the register for existing companies, and check some of the reasons why a company name may be rejected.
If you do get stuck finding a name to use, take a look at these 8 things to consider when naming your business.
Step 3 – Gather all the information
In addition to your company name, there a few other bits of information you’ll need before incorporating your business, including;
an address for the company.
at least one director.
at least one shareholder and details of the company’s shares.
details of people with significant control over the business.
your SIC code (the classification system to explain what your company does).
You’ll also need to prove the identity of any individuals involved in the company, such as the directors and shareholders.
Step 4 – Prepare memorandum and articles of association
Next, you need articles and memorandum of association which form the company’s constitution. The memorandum of association is a statement by the shareholders demonstrating their intention to form the company.
The articles are the written rules about the running of the company by the directors on behalf of the shareholders. Model Articles are available which can be adopted as is or tailored depending on the specific requirements of your company. It’s always good practice to familiarise yourself with the rules and agree any changes you may wish to make to your company’s constitution.
Step 5 – Register your business with Companies House
Once you’ve completed the steps above, you’ll be ready to incorporate your company, and have it approved by Companies House.
You can register your company directly through Companies House for £12. Alternatively, you can use one of the online registration services which provide comprehensive support packages to help you with process. This has additional benefits beyond just the company registration, including providing a registered office, help with setting up business bank accounts, and useful guides and toolkits to support you with that all important business management.
Running a company is a long-term commitment. Whilst there are plenty of benefits, there is also plenty to commit to.
Whilst there’s no reason why you can’t manage it all yourself, sometimes it does make sense to enlist the support of an accountant of assistant to help you with the admin. Keep your time free to focus on what you love doing in your business.
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