Registering your company with the relevant authorities is the first step on the road to breaking free from the world of nine to five employment and building your very own business empire.
On paper, it's also the easiest step - all you need is catchy name and a UK address. And yet despite being a relatively straightforward task, it's one that can trip up first time entrepreneurs who may not have an in-depth understanding of how it all works.
To make sure you get off on the right foot, just follow these simple tips.
Naming your company
Choosing your company's name is perhaps the most exciting part of an otherwise dull and unremarkable process. Before you going getting too crazy, though, there are a few things to keep in mind:
· First, your company name has to be unique. If in doubt, refer to the UK's Companies House, where you can look up a name to see if it already exists.
· It's best not to try any clever workarounds here either. Even names which are similar to existing companies can fall short of the rules.
· As per the HMRC's own advice, avoid any names which give off a misleading impression that your company is somehow associated with the government (e.g. "accredited").
If you've only just got your business off the ground, it might seem a little early to start worrying about directors.
But any company formally registered with the authorities must have at least one.
There are no special qualifications required for someone to be your director. They don't even need to live in the UK. They just need to be at least 16-years-old and have a correspondence address.
In addition to a director, you need at least one shareholder, and yes - you can simply use the same person again if you wish. Information relating to the number of shares your company has will also need to be disclosed (naturally, you're not expected to have too many at the outset).
You will also be invited to appoint a company secretary, but this isn't a requirement (and in practice, they won't have a great deal of executive power anyway).
Remember that personnel information will be made publicly available on Companies House.
For the most part, the process of forming a company can be done online via the UK government's official website (gov.uk) - but that doesn't mean you're off the hook when it comes to legwork.
A prerequisite for formally registering your business is that you have produced a memorandum of association, which is essentially a document signed by all shareholders proving their involvement in the enterprise.
In addition that, you'll also need an articles of association document. This is similar to the above, but requires slightly more detail, in that you'll need to set out some basic rules around your company, which all of your shareholders have read and agreed to.
This may sound a little fiddly and technical, but don't worry - there's templates available on the website if you get stuck.
You can register your company online and it will take 24 H for which service you have to pay £12 by credit or debit card or by PayPal. If you apply for company incorporation on paper, then you have to pay £40 to Companies House.
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