Companies in the UK
A company is called limited if it has a separate legal entity and has a filed tax return with HMRC. This company can be limited by guarantee or by shares. Limited companies are of two basic types in the UK. Public and Private but the public companies are rare in the UK. Private limited companies are everywhere in the UK they are most common due to their several advantages.
Private limited companies can be incorporated online (through licensed agents) or directly through Companies House. Private limited company is more affordable and less risky.
Advantages of a Limited Company
Following are some distinctive advantages of LTD Company:
- It has a separate entity which means Company’s financial matters are separate from its owner finance. The company is solely responsible for all of its debts. Owner’s personal assets remain safe in this type of business.
- It is easier for a private limited company to raise capital, borrow money or acquiring finance without any risk.
- As these companies are registered with HMRC for tax returns so they are more reliable for business dealings.
- Limited companies can claim additional perks in taxation and they are subject to lower corporation tax.
- Its structure is suitable for both types of organizations Profit and nonprofit.
- Its incorporation is very easy as it can be initiated by a minimum of one shareholder.
Formation of a Company in the UK
Several licensed agents are working to provide Company formation services in UK. They provide an online form includes name, address, and date of birth of its directors and the address of its registered office.
Other than this they also assist in attaining, Certificate of Incorporation, the standard MAO (Memorandum Articles of Association) and Memorandum of Association that includes the name of firm, registered office address and objectives of the business. It also contains name and signature if its members and the allocation of shares. New Company registration services in the UK take maximum two days to complete the process of its incorporation.
For the registration of a Private Limited Company, you need to provide a name for your Company. And these agents help you to choose an appropriate name for your company. It is a little critical and complex process as there are almost five lac limited companies working in the UK and choosing a different name can be a real task. Companies House most probably can reject your proposed name on the following grounds:
- It is invasive
- It is showing some connection with any public enterprise.
- It includes any sensitive expressions or words
- Include any banned words or signs
- It is similar to another company’s name
- It is deliberating leading to confusion
Cost of registering a new company
It was about 1975 when you could get a limited company at £50. At that time, the Company was registered under Company Act 1948. This amount was almost equal to the wage of one week. Now those £50 would worth £293.25. Inflation increase the prices for everything but the registration process is the only thing that has not much affected under inflation. If you register online it takes minimum £12 if:
- You have all the important document of incorporation.
- Company is limited by shares.
- And the company will be using Memorandum articles of association.
- There are different sources of payments like Debit or Credit and PayPal, and after this, it will take a maximum of 24 hours in registration and you are ready for the business.
If you are going to register it on paper it will only cost you a minimum of £40.
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