If you are thinking about launching a business in the United Kingdom, you should know that you have a few different options. Yet, most people are considering the formation of a limited liability company or simply a limited company. This is the reason why “how to set up a limited company” is one of the most frequently searched questions on search engines at least when it comes to British users.

Why start a limited company?

The truth is that there are many people who are thinking about starting a business as sole traders. This is a well-known alternative to the limited company solution. The main reason why they are considering this alternative is the fact that the procedure is simple. However, forming a limited company comes with way more advantages. For instance, with a company like this, you will be able to cut the tax on the business pays. In addition, you can keep your personal assets safe in cases of bankruptcy. The list of advantages is quite long and includes things that will probably strengthen your decision to opt for an Ltd.

How to Build a Limited Company: A Basic Guide

We will use this part of the article to explain how to build a limited company in the UK in a simple way. First of all, you will have to choose a name for your new company. Keep in mind that the Companies House has a list of all registered UK companies. The name you want to use for your business must be unique. So, it’s a smart move to visit the official website of the Companies House and see whether the name you find interesting is available or not.

Regardless of the company name you’ve selected, you should not forget that the name of your company will contain the word limited or the abbreviation Ltd. Let’s explain this with the help of an example. In case you want to name your brand new business “ John’s Pet Supplies Company”, the official and complete name of your business will be John’s Pet Supplies Company Limited or John’s Pet Supplies Company Ltd.

The next step that you should complete in this process is to appoint at least two people who will serve as officers of the company. The secretary is actually one of these people. The other (if there are just two officers) will be the director. It is possible to appoint the secretary as a director of the company, but you must appoint another director in that case. Let’s not forget to mention that the secretary of the company has specific legal obligations like ensuring that your company files annual returns to the authorities. He or she must also ensure that the directors and the company itself are following the laws and regulations.

It is common for business owners to select their spouses or close relatives as company secretaries. This is quite natural because they trust their closest family members. But, it’s not unusual to use a firm which offers company secretary services. They are asking for a certain fee for this favor.

The next step in this process is to plan shares allocation. Every company owner must choose a specific number of shares and set a value. In most cases, companies are formed with at least 100 up to 1000 shares and the value is one GBP per share. After that, all or some of these shares are issued to shareholders. Owning shares gives you the right to vote at all company meetings. At the same time, shareholders have the right to dividends.

In the end, you must think about the registered office for your company. The UK Company Law requires that every company must have a registered office. This is the address where you can receive all the official documents related to your business. This is also the place where you can get specific statutory documents associated with your company. In case an inspection wants to check the work of your company, they must be able to find all the necessary documents in your registered office. In most cases, people are selecting the home address of the director of the company, but it’s not uncommon to select the office of the company’s accountant.

Now that you know all these things, you are free to start the process to build a limited company in the United Kingdom.

How to speed up the process of limited company formation?

As we already said, How to Build a Limited Company in the UK is no longer a mystery. You can follow the simple guide we’ve provided and in the end, you will finish this process successfully. However, if you are new to this, it’s definitely a better idea to hire a reputable service provider that can help you.

According to many experts, the simplest and most convenient way to form a limited company is to hire the professional services of an online company formation agency. For a certain pre-determined fee which is usually not very high, these professionals will take care of this process. They will gather and send all the needed company documents to the Companies House. They have the necessary experience, knowledge, and expertise in this field and they will certainly accelerate this time-consuming process.

A decision like this makes sense because as a new business owner you will have a lot on your plate. You will have to take care of many other things that are more important for the business growth and expansion compared to these legal activities that have nothing to do with your business plan.

So, in case you are thinking about building a limited company, it’s a smart idea to seek for professional help. Surely, you can do some of the things involved in this process on your own and ask for help at a certain point of this process. In this way, you will save both money and time. We hope that this basic guide will help you build a limited company.


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