Company Registration - Guaranteed Business Banking - Accountancy

0870 228 1999 | My Account | Visit Our Store

0870 228 1999 | My Account | Visit Our Store


Frequently Asked Questions

1.What is a Limited liability Company?

There are essentially three legal or accounting structures recognised for starting a business. You can go it alone by being a sole trader, team up to form a partnership or operate a limited company. Choosing the right one is important.

2. What type of limited company formation?

There are four types of limited company formation.

  • Private company limited by shares - this type of company has a share capital and the liability of each member is limited to the amount unpaid on shares that a member holds. A private company cannot offer its shares for sale to the general public. You can set up this type of company using our Online company formation service.
  • Private company limited by guarantee - in this type of company, members do not make any contribution to the capital during its lifetime as they do not purchase shares. The members' liability is limited to the amount that they each agree to contribute to the company's assets if it is wound up. You can set up this type of company using our Online company formation service.
  • Private unlimited company - this type of company may or may not have a share capital and there is no limit to the members' liability. Because there is no limitation on members' liability, the company has to disclose less information than other types of company.
  • Public limited company - this type of company has a share capital and, the liability of each member is limited to the amount unpaid on shares that a member holds. A public limited company may offer its shares for sale to the general public and may also be quoted on the stock exchange.

The term limited refers to limited liability and there are around 1.5 million in the UK. If you're a sole trader or partner, you can be held personally liable for it – outstanding debts can be met from your personal assets.

A limited company, however, is a separate legal entity and can own property, incur debts, sue and be sued. Any business dealings are made on behalf of the company, rather than you. Its owners are liable only for the amount invested.

3.What are the advantages of a company formation?

One of the primary advantages of a company formation is the limited liability the corporate entity affords its shareholders. Typically, shareholders and directors are not liable for the debts and obligations of the corporation; thus, creditors will not come knocking at the door of a shareholder or director to pay debts of the corporation. In a partnership or sole proprietorship the owner's personal assets may be used to pay debts of the business. Maintaining the limited liability of a corporation requires that the shareholders and directors follow all the rules of governance, including holding annual meetings and maintaining meeting minutes, which is why we offer corporate advice as part of our complete incorporation package.

4. How do you set it up?

If you want to trade as a private limited company there are four things you need; a new company name, a UK address, an officer and shareholder for the company, then completing our Online Company Formation Service. The registered office is somewhere to keep official documentation, and to receive official correspondence.

Memorandum of Association: Part of the registration process involves stating the nature of your new company formation. This is done in a Memorandum and Articles of Association. The Memorandum describes what your company is and does, by outlining the following:

Company name: There are restrictions on some sensitive words and in some cases extra information will have to be provided. It must finish with the word limited but not have it elsewhere. Also, it must not be offensive or imply criminal activity and cannot have been registered by anyone else.

Registered office: This is the domicile where your companies registered office is located.

Objects of the company: Here is where you describe what your company does. You must limit your business activities accordingly, so make it a wide statement, such as “general commercial trading company”.

Officers: You must have at least one director to make sure all the rules are followed and official records maintained.

Limiting the liability of the member shareholders: This means each owner of the company has to contribute no more than the value of their shares.

Share capital: You must state the amount of capital in the company and how it is divided.

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