When starting a new business many entrepreneurs choose the option of setting up a company in order to further their commercial aspirations. Company formation has several advantages over other types of business vehicle and where deeded suitable a new company set-up can take a matter of a few hours.
The prerequisites for setting up a company are quite minimal and straight forward. Most companies set-up in the UK are limited entities and thereby automatically enjoy the separation of business and ownership provisions and built-in protections afforded by the Companies Act 2006.
Requirements for Setting up a Company
At least one director and one shareholder, who can be the same person. The director (and shareholder) can live anywhere in the world and never have visited or plan to visit the UK.
When setting up a company with a sole director it is not possible for this director to be another company. An actual person must be appointed to the sole position. Where several directors are to be appointed, there can be a mix of companies and persons.
The Companies Act 2006 mandates that all directors of UK companies must have reached the age of sixteen as at the date of their appointment. Currently disqualified directors and also prohibited from being appointed.
The shareholder of the company must allocate at least one share to themselves. More than a single share can be issued if required either at the time of setting up the company or at a later date.
A registered office address in the UK. A UK companies registered office address can be in England, Northern Ireland, Scotland or Wales and must remain in that jurisdiction for it entire life. The exception to this rule is setting up a company in England and Wales where the statutory address can move between the two countries.
There are several methods of setting up a UK company, the most popular being online via a formations agent. The procedure is usually quick, when the information being entered electronically and then transferred directly to Companies House for incorporation.
The slower, more outdated alternative is completing a physical document known as Form IN01 and sending it to Companies House via post. This method can take approximately three weeks compared to a few hours with the online variations.
