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What is the process for company formation?

  • Blog
  • 22 August 2017

Going into business for yourself is an exciting time. Being your own boss and being able to turn a hobby or skill into a successful venture can be a tantalising prospect.

Getting your business up and running has multiple steps and points to consider. One of the most important is ensuring your company formation goes smoothly.

We explain the key points of company formation that you should keep in mind.

What is the process for company formation?

Incorporation

Companies House is part of the UK Government and is responsible for the registry of business in the UK. In order to legally register your business, Companies House requires you to provide several pieces of information.

A suitable name for your business

Your company name is important. It should be something that doesn’t already exist in the marketplace, or sound like a competitor and should be something memorable that works on branding. It could be a simple reflection of your product, or it could be something more unique and thought provoking.

An address

You need to provide a registered address for your business. This could be your central office. Or if you are a sole trader, for example, this might be your home address.

Director(s)

Your business should have a management structure and your directors are a key part of this. When you register your business, you should list anyone in a directorial position. This could be one person or several.

Details of your shares and shareholders

You should have details of how your company’s share structure is set out.

This means providing a copy of your memorandum and articles of association. These are documents that outline the rules for shareholders with regards to the running of your company, its aims and their responsibilities.

You should also provide details for any major shareholders. This is because they have a degree of control over your company. This could be majority shareholders – people with a controlling stake in the company due to holding a large number of shares. Or it could be shareholders with the right to vote on business decisions, such as the acquisition of other businesses or when to expand and add new services to your offering.

A SIC code

This stands for Standard Industrial Classification of economic activities. It is essentially a code which helps to identify the type of business you run and what it does.

Registering your company

Once all of the various details regarding your company are in place, you can register it.

The cost of this varies. You can register online through the Gov.UK website. This allows you to register a company, usually within 24 hours, and is significantly cheaper than registering via post.

Postal registry can take eight to ten days and costs more than the online registration. However, you can pay extra to have this registration fast-tracked.

You can also register using third parties and business formation agents.

Once your company is registered, you will receive a ‘certificate of incorporation’. This provides you with your company number and the date of formation. This means you are in a position to begin trading. However, it’s important to note that you need to register for corporation tax within three months of you beginning trade.

How can FSB help with your company formation?

Company formation requires a number of important decisions to be made, but also involves putting together several important pieces of documentation to help your business get up and running.

With our expert services in company formation, we can help you to register your business and achieve your company ambitions. The service, which we offer to all our FSB members, includes:

  • All documentation posted to you first class on the first working day after formation
  • Electronic Memorandum and Articles of Association
  • Online company formation
  • Printed Certificate of Incorporation

To find out more about our company formation service and how we can help you and your business, please visit our FSB Company Formation page. Company formation is included as standard with our Business Creation membership. Please visit our FSB Packages page to compare benefits of our membership packages.

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