The United Kingdom is known for its very efficient business and investment environment. Its pro-enterprise culture is evident in the 5.7 million private sector businesses recorded in the country in 2018. But when it comes to setting up a company in the UK, there is still a lot to consider.
One of the first considerations is the type of entity to incorporate. This is typically determined by looking at the purpose, ownership, liabilities and management of the company. The most common corporate structure that is set up in the UK is that of a private company limited by shares ('private limited company'), which is incorporated under the Companies Act 2006.
Here are the key areas that must be addressed, and relevant forms provided to the Registrar of Companies, when setting up a private limited company.
These documents govern the company and consist of the following.
The Memorandum of Association: a short document confirming the subscribers' intention to form the company and to become members of that company on incorporation. The Articles of Association: the company's principal constitutional document. It should contain detailed administrative provisions of the company's operations agreed by its members. It sets out how decisions are taken by the members and directors, as well as various matters connected with the shares, general meetings of the members, appointment and powers of directors, board resolutions and notices, helping to ensure that the company's business runs as smoothly and efficiently as possible. A company can either adopt a form of Model Articles defined by Statute or adopt their own Bespoke Articles. 2. Company name
A UK private limited company can choose any name provided that:
it is distinctive: it cannot be identical to another name, differ from another name on the company index or effectively be the 'same as' an existing name already in use (for example 'Mongoose Limited' would be considered the same as 'Mongoose (UK) Limited'). it doesn't contain a sensitive word or expression: in some circumstances you would require official permission from the Secretary of State or other institution. What's considered a sensitive word or expression? One that implies national pre-eminence, government patronage or sponsorship connections, business representative status or specific functions, among others. the use of any words in connection to royalty cannot be used it doesn't contain certain characters...