Our Guide To: Company formation

Woohoo! You’ve made the choice to free yourself from the tyranny of having a boss, you’re going to set up your own company and take on the world!Before that there are few things to thik about and consider. Here is our helpful guide to make all this easier to you.

And what structure will that company formation be?

 

Sole trader, Partnership, Limited, Community Interest, Shares or Guarantee? And so on.

It’s at this point where many people will encounter their first hurdle on the road to freedom; just exactly where do I start? What do I want? What ARE all the different options? This of course assumes that you’ve already checked that your desired company name is actually free.

It is entirely possible for you to register your company with Companies House (for readers in the UK) for the very reasonable fee of around £15. Providing that you know exactly what you want and what sort of company structure.

Failing that, there are incorporation agents offering registration service for approximately £20, they can take care of all the ‘unknowns’ for you. It is realy easy and simple thing to do for them and at affordable to you price.

 

Difference between sole trader and limited company

 

Being a sole trader means that you are self employed and registering as such tells the HMRC what taxes you need to pay. There is no business registered. You are trading on your own behalf and with your name.

Registering a company creates a separate legal entity from yourself. Liability is then for the company and it depends on the structure of the company.

 

The basics:

 

Once you have picked your name, do a quick internet search with that name, see what (if anything) comes back in the search results.

An internet search should give you a good idea as to whether there are similar names, similar companies or even if domains are free.

Be aware, that even if the name is free & unregistered, you may still not be able to use certain things. For instance, if there is a possibility of being ‘mistaken’ for another company, you will not be allowed to register it; Coca Cola ish, Sainsburys (&fish), TESCOr! Etc.

There is obviously more to it, but you get the idea.

 

Companies House:

 

Companies House online allows you to check already incorporated companies. Once you have the name that you’d like, search the records on the Companies House website, this will tell you whether that name is free or already in use.

If you find that your chosen name is taken, or something very close to it, you can always register another name and then trade under a chosen name. There are obviously rules and regulations governing names and trading names, the best advice we can give you is to take advice from someone that does know the procedure.

All registrants will need to complete the form IN01, giving details of the directors. You will also need "Articles of Memorandum"; templates can be found on the internet, but Companies House also has them as part of the registration, these are fine so long as you are a "normal" business; read through them carefully though.

Once registered, you can expect a nice crisp "Certificate of Incorporation" on your doormat within approximately 14 days.

You have now officially formed a company, let the hard work begin! Good Luck!

You may also want to read about: Joint bank accounts