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Knowledge

For comprehensive guidance on limited companies please visit our information pages at companyformations.org

Why Form a CompanyFormation RequirementsMoney Laundering Regulations

A UK limited company is widely recognised as one of the most cost effective and easily managed corporate entities with which to establish a new business.

The principle benefit of trading through a limited company is the limited liability status which protects the personal assets of the company’s officers and members. Unlike non limited businesses, as long as the company is operated legally, directors and shareholders’ personal assets are not at risk in the event of the company winding up. As the company is seen as a separate legal entity, creditors are paid from the company’s assets not the directors’ personal assets.

Limited status can provide a certain level of confidence in the business both from suppliers and customers. It can be easily confirmed as a legally constituted concern and carries worldwide recognition as being a corporate body capable of conducting business on any continent whilst being established in a country with a stable and secure economy.

The company as a separate legal entity can continue to trade despite changing directors and shareholders. The company only ceases to trade when it is wound up and not when any individual leaves the company.

There can be taxation benefits to trading through a limited company. Current corporation tax levels mean that very little or no tax has to paid on retained profits and it is also possible to combine withdrawals through salary, dividends and benefits in kind in a more tax efficient manner than through non registered companies. Pension contributions for directors also qualify for tax relief and changes in legislation over the last few years have meant lower costs associated with the administration of limited companies.

Registering a limited company is a cost effective method of protecting a company name. There is no obligation for a limited company to commence trading within any set period after incorporation and names can be registered in anticipation of future development. No two limited companies can have exactly the same name and it is possible to raise an objection against any company attempting to register a name that is too similar to your own company name.

Company Name
Cannot be the same as an existing company. There are certain sensitive words which need clarification in order to be acceptable to Companies House. We will check your chosen name on receipt of order and contact you immediately if any clarification is needed.

Company Officers
The company must have at least one officer. The company must have at least one director. A director can also be a company secretary, the appointment of a company secretary is now optional.

Company Directors
Are responsible for the day to day management and control of the company. There must be minimum of one director, there is no maximum. The minimum age for a director is 16.  Directors have a personal responsibility under law to ensure that all Companies House filings are up to date and that company law is adhered to at all times. Directors do not have to be UK nationals or resident in the UK. Under new regulations directors must now provide their home address which is not added to the public record and a service address which is shown on the record and becomes the point of contact for that director. This can be the directors home address or company registered office or can be a professional service address. We can provide this address for any director.

Company Secretary
The secretary is responsible for the administrative matters of the company. The secretary is answerable to the directors and is responsible for the upkeep of company registers and minutes. A nominee secretary can be provided by OCS if required and our annual compliance scheme is designed to relieve you of the burden of statutory paperwork. To order these services simply tick the boxes on the company order form as required.

Authorised Capital
Under the new Companies Act 2006 which came into force in October 2009 there is now no set authorised capital requirments for new companies.

Shareholders
There must be at least one shareholder as a company cannot exist without a share capital. Broadly speaking shareholders are the owners of the company in relation to the amount of shares held. If the company is to be wholly owned by yourself then you only need to hold one share in your name. Alternatively should you wish to allocate shares to other people any number of shares can be issued. For example a split of 100 shares between four or five people will easily indicate relative percentage shareholdings held by each individual.

Registered Office
Must be located within England and Wales (or Scotland for a Scottish Company). The address will appear on the public record and is used by Companies House, Inland Revenue and authorities for contacting the company. O.C.S. can provide registered office facilities where required for a fee of £95 inc VAT per annum.

In order to comply with Money Laundering Regulations we are required to obtain proof of identity from any clients that we provide ongoing services for (ie. registered office address, nominee shareholder or annual company secretarial service). It is not required for company formations or one off company secretarial work.

Where required we will need sight of a valid passport or UK driving licence (for non-UK residents a national identity card is also acceptable) plus a recent utility bill or bank statement.  If you do not wish to present originals in person, it is acceptable to send certified copies of the above.

Copies must be certified by an independent professional person,  eg G.P.,  solicitor, notary, chartered accountant or post office employee.  They must certify that it is a true copy of the original and sign and add their business contact details. These must then be posted to us showing the original ink signature of the person certifying the ID documents.

Company formations can be completed immediately and any annual services, (registered office, corporate secretary, nominee shareholder or annual compliance) can be put in place, but we will require relevant proof of identity if any annual services are ordered within 14 days. Company documents will not be completed until we have correct valid ID. If this requirement is not met within this time frame these services will be terminated. We may require additional ID documentation and verification as required from time to time and reserve the right to terminate services at any point if ID as requested is not supplied or if we feel that a company may be acting in a fraudulent or suspicious manner.