Limited Company Guidance
What is a Limited Company?
A limited company is a separate legal entity created by incorporation at Companies House. Once incorporated Companies House issue a certificate and company registration number. This becomes the company's ID so to speak. You can change the company's name at any time but you still keep the registered number. The profits, losses, assets and liabilities belong to the company. The company is then owned by its members / shareholders and run by the managing director / directors, whose assets are protected from loss if the business should fail. This gives the directors Limited Liabilities. If the company should fail the directors personal assets are protected. Because a company has a life of its own the business can continue to trade despite the resignation or death of any directors or shareholders. Other reasons for choosing a Limited company may include ownership of property, obtaining outside finance, taxation, status and protection from risk.
What is a Registered Office?
It is the official address of your company, to which Companies House letters and reminders will be sent. The Registered Office can be situated anywhere in England or Wales (or Scotland if your company is incorporated there). The Registered Office must always be an effective address for delivering documents to the company, and therefore Post Office Boxes are not allowed. If your company wishes to change its Registered Office address after incorporation, the new address must be notified to Companies House on form 287.
What is the minimum number of officers your company requires?
Every company must have formally appointed company officers at all times.
A private company must have at least:
- one director
A public company must have at least:
- two directors
- one secretary - formally qualified
After incorporation, you must inform Companies House about:
- the appointment of a new officer - use form 288a
- an officer's resignation from the company - use form 288b
- changes in an officer's name or address or any of the other details originally registered on Form 10 - use form 288c
Can anyone be a Company Director?
In general terms, yes, but there are some rules. You can't be a company director if: you are an undischarged bankrupt or disqualified by a court from holding a directorship, unless given leave to act in respect of a particular company or companies
There is no minimum age limit in the Companies Act for a director to appointed in England or Wales, however, he or she must be able to consent to their own appointment.
In Scotland the Registrar will not register for any company the appointment of a director under the age of 16 years.
Do I need to be a Limited Liability Company?
The reasons for incorporating a limited liability company are varied. For example, it could involve ownership of a property, obtaining investment funds, taxation or contractual relationships.
Many businesses function satisfactorily as sole traders or partnerships. However their personal assets are at risk in the event of a failure.
The key point to recognise is that a company is a separate entity.
- This means that it is a legal person in its own right.
- It is separate from those who own or run it, and has 'limited liability'.
What does Limited Liability mean?
Limited liability gives the owners of the company (its shareholders/members) protection should the company fail.
This means that if a company is put into liquidation, the people who own the company will only be required to pay what they have already paid or agreed to pay towards settling its debts.
How we incorporate a Limited Liability Company
Simply let us check the availability of your proposed company name using our free name checking service. If you require a "Ready Made" company this can be transferred to you immediately. A company with the name of your choice will be incorporated within hours. You can choose a name from over 1000 of our suggested names.
What responsibilities will I have towards Companies House?
Every company director has a personal responsibility to ensure that statutory documents are delivered to the Registrar of Companies as and when required by the Act. In particular:
- accounts
- annual returns (Form 363)
- the appointment of a new director or secretary - use Form 288a
- an officer's resignation from the company - use Form 288b
- changes in an officer's name or address or any of the other details originally registered - use Form 288c
Why does Companies House need this information?
In exchange for the benefits of trading with limited liability, companies must deliver certain information about themselves to the registrar. He must then make this information available for inspection by the public so that they can make informed decisions about companies that they may wish to invest in or do business with. Remember, delivery of documents does not take place until they reach the Registrar.
Can I choose any name I want for my company?
It is important to check that the name you want is acceptable to Companies House. Please go to our free Company Name Check
Briefly, the restrictions are that:
- you cannot register the same name as another company;
- the use of certain words is restricted; and
- names likely to cause offence are not allowed.
It is also important to check whether your chosen name is similar to any other names already on the register. If your chosen name is too like another name, an objection could be made within the 12 months following the incorporation of your company and you could be directed by the Secretary of State to change the company's name
Certain words and phrases are classed as sensitive by the Department of Trade and Industry. If this is the case you will be prohibited from using them or you might have to justify you are entitled to use the name. For further advice, please got to Choosing a Company Name.
On which documents must my company name be shown?
The company must state its name, in legible lettering, on the following:
- all the company's business letters
- all its notices and other official publications
- all bills of exchange, promissory notes, endorsements, cheque's and orders for money or goods purporting to be signed by, or on behalf of the company
Where must my company name be displayed?
Every company must paint or fix its name on the outside of every office or place in which its business is carried on - even if it is a director's home. The name must be kept painted or fixed and it must be both conspicuous and legible.
Do I need a Company Seal?
Changes to the Companies Act in 1989 mean that a seal is no longer required and therefore our standard package does not include a company seal.
Share Transfer forms?
We do have Form 88(2) available for download, should you wish to issue any further shares in your company after incorporation.
What is my accounting reference date?
The accounting reference date is the date in each year to which accounts will be drawn up. The date depends on the date of incorporation as it is the last day of the month in which the anniversary of incorporation falls. For example, if your company is incorporated on 2 July this year, the accounting reference date will be 31 July, and its first financial year must end on 31 July next year (or within seven days of that date).
Can I change my accounting reference date?
You may change it by sending Form 225 to the Registrar. You must do this during the accounting period affected by the change or during the period allowed for delivering the associated accounts.
What are the authorised shares?
This is the number of shares your initially authorise your company to issue to shareholders/subscribers. Usually a share issue of 1000 with each share valued at £1 is used.
It is worth noting that although you authorise 1000 shares, if only 1 share is issued to one person, that person becomes 100% shareholder in the business.
How do I issue more shares?
If you wish to issue further shares up to the authorised share capital form 88(2) should be completed and sent to the Registrar of Companies.
You can increase your authorised share capital by passing an ordinary resolution at a general meeting. A copy of the resolution and Form 123 detailing the proposed increase must then reach Companies House within 15 days of being passed.
On a similar note, the authorised share capital of a company can be reduced using Form 122 and must reach Companies House within 1 month.
What if I no longer need my company?
Private companies that have not traded or otherwise carried on business for at least three months may apply to the Registrar to be struck off the register.
Can I change my registered office?
If a company changes its registered office address the new address must be notified to Companies House on Form 287. This can be done online using our website free of charge.
Registered Office service?
Yes, we offer Registered Office services.
Where can I obtain VAT information?
The VAT office information service. You can download the VAT Registration form.
What is included in your package?
We offer a standard registration package, along with a number of other options available at the end of the formation process. More information on these can be found on our services page. All levels of service provide you with your complete company formation, certificate and Memorandum and Articles documents to start trading.
Can I use you to manage my existing company?
Yes, you can use our system to manage any document services we have to offer whether you incorporated your company with us or not.