Blog 2. How is a company formed in the UK?
116 Feb 2020 Quality Company Formations
How is a Company Formed?
A limited company is formed by filing an application at Companies House (the UK’s registrar of companies) and satisfying the requirements set out in the Companies Act 2006.
The process of company formation is an easy and affordable one which usually takes 3 to 6 working hours (and certainly no more than 24 hours) if you file an application online.
File an application at Companies House
To apply to set up a limited company in the UK, Companies House form IN01 must be completed and delivered to the registrar. There are three ways that you can do this:
1. Online through an authorised company formation agent
Using electronic software filing that links directly to Companies House, this online service simplifies and expedites the company formation process and facilitates the incorporation of all company types, including companies with bespoke articles and multiple share classes.
2. Web incorporation service
Available on the Companies House website, this service enables you to incorporate a basic private company limited by shares with Model articles of association and ‘Ordinary’ shares.
3. Paper filing by post
You can download form IN01 and send it by post to Companies House, but this option takes much longer and is more expensive. The paper version of the application consists of 35 pages, so it is more complex than the simplified online version of the form.
Information required to register a limited company:
The information that you will have to provide on the application includes:
- Proposed company name
- Type of company (private company limited by shares or limited by guarantee)
- Principal business activity
- Registered office address
- Articles of association
- Details of company secretary (optional)
- Details of all company directors – minimum of 1
- Details of all subscribers/members (shareholders or guarantors) – minimum of 1
- Information about shares (if the company is limited by shares)
- Details of all People with Significant Control (PSCs)
See also: A limited company with privacy built-in
At first glance, this list of required information may seem daunting. However, the application form is generally very quick and easy to complete if it’s done online through a company formation agent, especially if the company is being set up with just one or two people.
In such instances, the same details will be used in multiple sections, e.g. details of directors, subscribers, and PSCs. In other sections, it will simply be a matter of checking a box or selecting an option from a list.
Application is processed at Companies House.
When your application has been filed at Companies House, it will be processed and approved within 24 hours (online applications) or 10 days (postal applications). In practice, most applications submitted through company formation agents are approved in three to six working hours.
Companies are incorporated at one of three Companies House locations:
- Registrar of Companies (England & Wales) in Cardiff
- Registrar of Companies (Scotland) in Edinburgh
- Registrar of Companies (Northern Ireland) in Belfast
The location of your registered office address will determine which registrar of companies processes your application and incorporates your company. This is because the UK has three distinct legal jurisdictions (England & Wales, Scotland, and Northern Ireland), so it is not possible to simply register a company in the ‘United Kingdom of Great Britain’ as a whole because each of these jurisdictions has its own legal system and court.
See also: What is the right company structure for my business?
When your application has been approved, the registrar will publish your company details on the public register of companies and issue a Certificate of Incorporation to confirm that it legally exists. At this point, your company will become a distinct legal entity and you can start trading immediately.
Benefits of forming a company online:
Due to their user-friendly format and in-built checks, online applications result in far fewer errors and rejections. If you choose to set up a limited company online through a company formation agent, you will also benefit from a simplified application process that is quicker and cheaper than the online or postal services available at Companies House.
