Types of Limited Company Formations

Running a business in the current volatile market scenario can prove difficult. It is not unusual to see businesses run into financial difficulties. Therefore, it is recommended that new entrepreneurs choose limited company formations over other kinds of setups, such as sole proprietorships. The primary advantage of limited business setups is that it does not jeopardize the personal assets of the owners, directors or shareholders in the event of failure. However, prior to registration, it is crucial to decide the type of limited company formation one wants to opt for.

Limited Company Formation: 4 Types

Most small or medium-sized business organizations that acquire the limited company status generally become private limited businesses. However, there are essentially four types of limited company formations:

Private company limited by shares: Most private businesses are owned and operated by the shareholders and they are limited by shares. This implies that the liability of each member and shareholder is in proportion to the individual share capital of each.

Private company limited by guarantee: Such setups do not have shares and the managing committee members stand as guarantors in place of shareholders. In case of business failure, the liability of the members is limited to the sum they have decided to contribute as company assets. This business structure is commonly used by commonhold businesses, social enterprises and charities, in order to reduce the personal liability of the directors and trustees.

Private unlimited company: Very few businesses opt to become unlimited companies, since there is no limit to the managing committee members' liability. Such companies may or may not choose to have share capital.

Public limited company (PLC): Such a company setup has a share capital, which restricts the liability of the members to the amount that remains unpaid on the shares. These companies:

• are allowed to raise cash by selling their shares on the stock market
• must possess a share capital of a minimum of £50,000 or the same amount in euros
• have to appoint two directors to run the management as well as a qualified secretary

A private company limited by shares can become a PLC only by re-registering. Naming a company is of great importance as well. Entrepreneurs must avoid names that are offensive or those that bear a resemblance to any other company name in the Companies House index.

You can complete the procedure by yourself or you can select an agent to do it for you. To use the electronic method, you will need an agent. To get the services of the most experienced agent and at the most reasonable rates, contact www.companyformations247.co.uk.

Company Set Up Tips

The year 2009 saw 348,677 businesses being established in England, Wales and Scotland, while 162,329 companies were set up between January and May 2010. These statistics, which have been provided by Companies House and featured on the CompleteFormations.co.uk website, prove that the UK is the hotspot for most entrepreneurial ventures. The primary reason for entrepreneurs preferring the UK over other countries is the stable economy, which is conducive to forming and operating industries. Moreover, the legal procedure for establishing a company in the UK is very simple. Despite this, some company set up tips would prove beneficial.

Company Set Up: Points to Remember

You can handle a company set up all by yourself or you can choose to employ an agency to do the job for you. Whatever the case, there are certain important aspects you must remember:

Document filing: Documents can be filed at Companies House in two ways:

Electronic – This kind of filing requires compliance to specifications listed out by the registrar. The software filing format is present in the rules mentioned in the website. Electronic filing will require £15 as registration fees and £30 for ‘same day’ service.

Paper – Each paper must state the official name and number prominently. However, there are a few exceptions to the rule that are mentioned in the registrar’s rules. The paper must be a plain, white, A4 size, with matt finish. The text must be black, clear and legible. Follow this guideline while filling up the forms:

• use black ink
• use bold lettering
• make sure it is in the portrait format
• carbon copies will not be accepted
• refrain from using a dot matrix printer
• photocopies can result in grey shading, thereby, making the text unclear

Choice of company name: An entrepreneur can select a company name but it has to be approved by the Secretary of State before it can be utilized. Some restrictions are applied on usage of names. Proposed names will be barred if there is:

• any suggested connection with Her Majesty’s government, local or public authority, or any devolved administration;
• inclusion of sensitive words and expressions

There are some other clauses in addition to the aforementioned ones. They are:

• Insertion of words denoting a particular business type, especially if the business does not belong to the category. For instance, the inappropriate use of ‘limited’, ‘Limited Partnership’ or ‘unlimited’.
• Identical to any other company name mentioned in the Companies House index.

Take the aid of www.CompanyFormations247.co.uk, one of the most renowned agencies in the UK, to fill up the forms.

Roles of Companies House

Companies House, an executive agency of the UK government, is the authorized registrar of business incorporations in England, Scotland, Wales and Northern Ireland. Its main headquarters are in Cardiff, while the operational offices are in Belfast, Edinburgh as well as London. As a state-funded body, Companies House performs several vital functions, including provision of company registration information to the public, ensuring compliance and enforcing rules.

Companies House: Roles and Duties

Apart from validating and authorizing company formation applications and providing a unique company number, Companies House also:

Regulates statutory accounts: All companies are legally bound to prepare and submit annual statutory account, which is handled by the sole registration authority. The submission deadlines differ according to the type of company. For example, Public Limited business houses are allowed a shorter time period to complete their financial statements than the private entities. Companies House verifies that the submitted documents are prepared in compliance with the required format for the company type in question. It checks for any exemptions related to small and medium-sized businesses.

Ensures submission of annual returns: Submission of yearly returns is another legal requisite of companies functioning in the UK. Firms are supposed to detail information about the directors, secretary, shareholders as well as their current registered address. Companies House takes care of all this.

Tracks company changes: Certain circumstances, such as transfer of powers, appointment of a new director or secretary, change of official address and other similar alterations, require notifying Companies House about them. The notifications can be made electronically or through paper. Forms 288a, 288b and 287 need to be used to make and report the changes. The Registrar of Companies will offer the validation stamp if the procedure is completed properly. Companies House would also file and maintain a record of all these changes.

Provides business information: This authority offers facilities allowing the general public access to necessary information about registered UK companies. The details can be accessed via pots or electronically, the latter being the most convenient method of procuring information. However, a company director’s residential address is no longer displayed in the public domain. This has been as a security measure for celebrities, high profile businessmen and those operating in sensitive areas. Anyone needing access to such information has to apply to the court with evidence of genuine requirement.

You can submit your application to this supreme company incorporation authority via an agent, the easier and time-effective option. Choose the experienced professionals at www.companyformations247.co.uk to complete this task for you.