Company formation

This article is about forming a company in the United Kingdom. For a more general discussion of forming a business, see Incorporation (business).

Company formation is the term for the process of incorporation of a business in the UK. It is also sometimes referred to as company registration. Under UK company law and most international law a company or corporation is considered a separate entity to the people who own or operate the business.

Today the majority of UK companies are formed the same day electronically. Companies can be created by individuals, specialised agents, solicitors or accountants. Many solicitors and accountants subcontract incorporation out to specialised company formation agents. Most agents offer company formation packages for less than £100, the cost of carrying out paper filing directly with Companies House is £20. This fee does not include the cost of witnessing documents or preparation of memorandum & articles of association for the company which would usually be carried out by a solicitor or accountant. Forming a company via the paper filing method can take up to 4 weeks.

Formation process for private limited companies

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Paper process

Under section 9 of the Companies Act 2006,^[1] those forming a company must send the following documents, together with the registration fee, to the Registrar of Companies.

For detailed information see the Companies House guide.^[2]

Articles of Association

The Articles of Association (often referred to as just ‘articles’) is the document which sets out the rules for the running of the company's internal affairs. The company's articles delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.

In the event that articles are not registered for the new company, model (default) articles will be registered. These model articles can be chosen to be adopted in the IN01 form. This new procedure was introduced by the Companies Act 2006, Section 20.^[3]

Form IN01

This contains the intended situation of the Registered Office, (this will be either in England and Wales, Northern Ireland, Scotland or Wales), the details of the consenting Secretary and Director(s), details of the subscribers and, in the case of a company limited by shares, details of the share capital. The form also includes the Statement of Compliance that the requirements of the Companies Act have been complied with.

Memorandum of Association

This contains the names and signatures of the subscribers that wish to form the company and, in the case of a company limited by shares, a commitment by the subscribers to take at least one share each. A draft template is available on the Companies House website.^[4]

Electronic process

The electronic process can be accessed using compatible software that works with the Companies House eFiling service^[5] and an account with Companies House. Company formation agents have direct links into Companies House, to look up the company name, and submit the company. Different agents have differences in their processes caused by their website and software implementation. Companies House have a list of company formation agents that have passed integration testing.^[6]

Types of company

The following can be formed by registration at Companies House:

• Public limited company (plc)
• Private company limited by shares (Ltd, Limited)
• Company limited by guarantee
• Unlimited company
• Limited liability partnership (LLP)
• Limited partnership (LP)
• Societas Europaea (SE): European Union-wide company structure
• Community interest company
• European economic interest grouping (EEIG)

See also

• Incorporation (business) - US perspective

Notes

1. ^ Previously section 10 of the Companies Act 1985
2. ^ Companies House Guide to Company Formation
3. ^ http://www.legislation.gov.uk/ukpga/2006/46/section/20
4. ^ http://www.companieshouse.gov.uk/forms/formsOnline.shtml
5. ^ E-Filing compatible software providers
6. ^ E-filing company formation agents

External links

• Companies House eFiling
• Companies House list of formation agents