This guide on setting up a company has been written to provide current information on the requirements, costs and some of the practicalities of registering and running a UK company.

Requirements

The Companies Act 2006 introduced several changes in the period from January 2007 to October 2009 which impacted on the rules for creating a UK limited company.

These changes are reflected in the requirements listed below:

Personnel – Only one person is required to setup a UK company. That person can act as both the director and shareholder and has the option to also be the company secretary if they wish. There can of course be more than one director and/or shareholder appointed either at the time of initial incorporation or at a time subsequent to the company being registered.

Statutory Address – All UK companies are required to specify a location where Companies House can contact them by post. This is commonly known as the company registered office or statutory address and the rule state that it must be located in England, Wales, Scotland or Northern Ireland.

When setting up smaller UK companies is the usual for the director’s/shareholders residential address. In some instances, a third party registered office facility is used to satisfy the requirement where a rental or mortgage covenant prohibits the use of the home address for business purposes.

Costs

The costs of registering a company can vary depending not only on the type of package purchased but also the method by with the company is formed.

To deal with the latter aspect first, UK companies can be set-up in two ways; either by going directly to Companies House and carrying out a manual submission or by using a company registration agent such as Complete Formations who have electronic incorporation facilities linked themselves to the Companies House system.

Very few new companies today are registered using the direct Companies House submission method. To many people the required paper forms are quite complex and with the timetable for a successful incorporation being weeks instead of hours, this makes this option even less appealing.

Where this formation method is used the cost is usually £20 payable to Companies House.

The preferred option chosen by the majority of those setting up a company is the electronic formation method. Although an online company incorporation usually has a base cost marginally above the £20 charged by Companies House they do provide both significant speed and support advantages.

Online company registrations take approximately 3 hours to provide the applicant with a fully incorporated company complete with official certificate of incorporation and number

In addition, they is usually offline and online support in the form of experienced staff to aid the applicant as well as tried and tested incorporation systems designed to check submissions and identify errors before a application is sent over the web to Companies House.

Priced at around £24.99 the electronic option is both cost effective and presents a far more reliable means of quickly securing a chosen company name and being able to start trading.

Most company formation agents including Complete Formations provide a range of packages which the purchaser can select depending on their individual requirements.

Some common package features include printed documents, registered office facilities and mail forwarding services which can aid a new business.

Practicalities of Setting up a Company

The technology and support services available generally make setting up a company a straight-forward process. To that end there are approximately 25,000 - 30,000 new companies registered each month, 95% of which are by electronic means.

The significance of this is that there exist well oiled and efficient systems for incorporating UK companies.

As with any system things can go wrong, but equally important is the speed at which issues can be rectified.

The Companies Act 2006 recently introduced several provisions one of which came in to effect on 1 October 2009. The creation of “serviced addresses” allows directors and shareholders of a company to keep their residential address private.

Although home address details are required on an incorporation application they are not made public and therefore can not be seen by a person not authorised to do so.

This change has been widely welcomed by formation agents and those setting up UK companies as a significant measure in protecting people’s personal information.

Complete Formations have helped many contractors incorporate their new company and would be delighted to assist you. Our website is full of useful information and tips on setting up a new business and our staff on always on hand to provide you with a high level of personal service