Company Formation Answers

How much does it cost to form a limited company?

The government filing fee to register a limited company is £15. We have a free company formation package and we also have our Companies House Company Formation package which costs £9.99. Both of these packages include the government filing fee and are cheaper than forming a company directly with the government.

When you form a limited company the government only issue you with a Certificate of Incorporation. You are expected to put the rest of your legal documents in place yourself to make the company compliant with the Companies Act. We can provide these documents for you and do additional registrations such as VAT, PAYE and domain names at the same time as your company is being formed so that you can get your company up and running as quickly as possible.

What sort of company is registered with a company formation?

  • The most common type of company in the UK is a private company limited by shares. Most of our company formation packages, including our free company formations, are for this type of company. However we do form the full range of UK limited companies. These include:

  • Private Company Limited By Shares - A separate legal entity from the business owner. Has one or more directors/owners who are issued with shares in the company. Established and run to make a profit with profits being distributed to the owners in the form of dividends. The most common form of limited company and the one most of our company formation packages will create.

  • Company Limited By Guarantee - A form of limited company similar to a company limited by shares, does not have shareholders, but instead, its members act as 'guarantors' who agree to contribute a set amount of money on the winding up of the Company. This form of limited company is often used for non-profit reasons and is a recommended structure for many sports clubs and community organisations.

  • Charity Company - The traditional route to forming a charity in the UK is to form a Company Limited by Guarantee (above) but to form it using memorandum and articles of association which meet the requirements set out by the Charity Commission. Once the company is formed it can then be registered with the Charity Commission to officially make it a company. 

  • CIC - A Community Interest Company is actually a modified version of either a Private Company Limited by Shares or a Company Limited by Guarantee. Although a CIC can make a profit they are often formed for non-profit organisations which have a social aim. 

  • Limited Liability Partnership - LLPs are often used by accountants and solicitors. They allow the individuals in the company to operate independently but to share some of the protection offered by being a limited company. 

  • Public Limited Company - is quite simply a limited company which is allowed to offer shares for sale to the public. This means that it can derive extra funds where it needs them by selling more shares and diluting ownership. Before a public limited company can begin trading it must show that it has issued at least £50,000 worth of shares. Registration of a public limited company also requires a minimum of 2 directors but otherwise is carried out in much the same way as any other Company Formation.


What is the difference between a sole trader registration and a company formation?

Registering as a sole trader informs HMRC that you are going to be self employed and will be earning money through your own business. It does not register your business, or create a business; it just tells HMRC what you are doing so that they know how to tax you. As a sole trader you are trading as an individual and taking on all financial and legal liability yourself.

Doing a company formation sets up a company as a separate legal entity from yourself. By trading through the company you can benefit from ‘limited liability’ from financial and legal issues. It also means that multiple people can formally take joint ownership of the business by allocating shares in the company.


What is an off the shelf company?

Off the shelf companies are also sometimes called ready made companies. In the past it used to take several days or even weeks to form a limited company. Therefore some company formation agents used to register companies with generic names and keep them 'on the shelf'. When a customer wanted to form a limited company the agent would simply take one of their ready prepared companies and transfer it into the customer's name. This was a much quicker process than forming a new company and meant that you could get a company number the same day. 

With the modern electronic company formations systems that we use we can form a brand new limited company from scratch in 3 to 5 hours. So for most people it is now more time and cost efficient to get a new company than it is to buy a ready made off the shelf one. However, we do still offer some vintage off the shelf companies for people who prefer them. You can see out current list of vintage off the shelf companies by clicking on the link below.


Who can be a company director in the UK?

Basically anyone can carry out a UK company formation and become a company director unless they have been specifically banned from doing so (usually as a result of bankruptcy or legal proceedings). There is an age limit to form a limited company. You have to be 16 years of age or older (Section 157 Companies Act 2006). Although in practical terms it is extremely difficult to do things like open a bank account for your company until you are 18.

You only need one person to form a limited company. According to Section 154 of the Companies Act 2006 - A company limited by shares requires at least one (human) director but there may be more and it is possible for a limited company to be director of another limited company, as long as there is at least one human being who is already a director.

There is no longer a requirement to have a company secretary (Section 270 The Companies Act 2006) but you may choose to do so if you wish.

The final requirement is that you have, or can provide, a UK address to register to company to (this is something we can help with). 



Who should act as the company secretary?

Since Section 270 of the Companies Act 2006 came into force there is no legal requirement to have a company secretary but many limited companies still choose to have one. Anybody can act as the Company Secretary of a private limited company. A person may consent to act as both the Company Secretary and be a Director of the same limited company.

How long does it take to get a company registration number?

Company numbers can only be generated when Companies House are open. Their hours are 9 am, to 5 pm, Monday to Friday. If you order a company outside of these hours we will submit it first thing on the next working morning.

Assuming you place your order during normal business hours we will check over the details you have submitted to make sure there are no obvious issues (e.g. a sensitive word in the name). We then submit your company formation directly into the Companies House systems. From that point it typically takes 3 to 5 hours to get your company number back.

If you order our Premier Plus package we will prioritize your order and make sure it gets submitted straight away so you can get the company number back as quickly as possible.



What are the memorandum and articles of association?

The memorandum and articles of association are legal documents that set out:

  • The Company Name

  • The Registered Office location and

  • The internal constitution of the company

You will probably be asked for this document when you open a bank account for your company. All our companies are incorporated using standard 'general commercial company' memorandum and articles. These are written in a way that is designed to enable your company to carry out any business activity and to minimise the administrative requirements on the company. Our company formation service includes the drafting of these essential company documents to ensure proper registration with Companies House.


What is the certificate of incorporation?

The certificate of incorporation is the document issued to confirm that Companies House has incorporated your company name and states the date of incorporation and the company number. This should be printed on 160gm ivory card.


Is there any paperwork to fill out?

Using our online company formation service means there is no paperwork to fill out and sign. Instead you fill out a few simple online forms and we do the rest. Alongside a UK registered office address for the company and a residential address for the company director(s) we need 3 bits of person information. They are:

  • Mother's maiden name

  • Town of birth

  • Eye colour

If you are using our Registered Office Service we may ask for additional ID such as scanned copies of passports or driving licenses.

Can I choose any name for my company?

Yes, you can choose any name you like as long as it is not already registered, 'same as' or 'too like' an existing company name or likely to cause offence. Some words in company names are however restricted or forbidden, these are called 'sensitive words'. Due to changes made in the Companies Act 2006 words added to company names that might once have been sufficient to differentiate them from an already registered name and thus make them registerable are no longer deemed as such. These include words like 'services' and 'UK'. You can register a name which includes sensitive words as long as it is approved by the secretary of state. For more information on sensitive words and guidance on choosing a company name, please see the relevant pages on our site. Our company name change page might also be relevant.

Remember that you must include the word "limited" or the letters "Ltd" as part of your company name when carrying out a company formation.

To cover yourself fully, you should also check that your name, or part of your name has not been registered as a Trademark by somebody else.


How should I allocate shares in my company?

By law there must be at least one shareholder who subscribes to take at least one share. If you wish to take an equal amount of shares with another member of the company then it is usual to take one share each. Authorised share capital has now been abolished by The Companies Act 2006, so allocation of shares is now carried out slightly differently. If you choose the amount of shares to be issued by the company then the following are examples of how to distribute the shares.

  • Mr Smith wants to own 100% of the issued shares in Company X Limited. Mr Smith would take 1 share or whatever the total number is issued (if 100 were issued, he will take 100)

  • Mr Smith and Miss Jones want to own 50% each of the issued shares of Company X Limited. Mr Smith will take 1 share, Miss Jones will take 1 share (if 100 shares were issued, they would have 50 each).

  • Mr Smith wants to own 80% and Miss Jones 20% of the issued shares of Company X Limited. Mr Smith will take 8 shares, Miss Jones will take 2 shares (if 100 shares were issued it would be 80 and 20 respectively).

If you require advice regarding the shareholding for your limited company please contact our sales team.

What is the registered office?

The registered office must be an address in England and Wales, or Scotland where legal documents can be served on your company. This address is kept on the Companies House database and is available for anybody to inspect free of charge. This address must also be written on all your company correspondence such as letterheads and invoices. It is quite common to use a director or company secretary's home address as the registered office address.

The Company Warehouse offers a Registered Office address service if you wish to keep your home details separate from your company details. There is a small annual fee for this service that includes forwarding up to 10 items of statutory and legal mail each year.


What is a director's service address?

In an effort to protect director's personal details, the Companies Act 2006 introduced a 'service address' for directors. Directors will now have a service address and their residential address. Only the service address will be made public. The residential address is viewable by public authorities and credit agencies, but no one else. This allows some protection for the director. It is possible to use the companies registered office address as the director's service address.

I've carried out a company formation but now I need to make changes, can you help?

Quite often people find that the "generic" memorandum and articles of association used to form their limited company are very restrictive can cause problems when they want to take their business in a new direction. We offer company restructuring packages which help you get the most out of your limited company, taking advantage of a number of benefits offered by other limited company structures. For more information, see our article
Company Restructuring - Making The Most Of Your Limited Company.

You might also find that you wish to make other changes to your company such as a company name change or change to the directors of the company. We can help in most cases. Contact our business consultants today to see what we can do to help you on 0800 0828 727.


My company has been struck off the register, can I get it put back on?

In this instance the best course of action is to complete a company restoration. In most instances we will be able to help you with getting your company back on the register. Contact our company restoration team today for support and guidance on 0800 0828 727.

What are the alternatives to Company Formation?

As an alternative to company formation you may wish to purchase a Vintage Company there are a few reasons for doing so. The benefits of using a vintage company instead of completing a company formation to start a new limited company include:

  • An established name

  • Better credit-worthiness

  • Improved sense of trust-worthiness

  • Previous account submission

For more information see our blog article "What is a Dormant Company?"