The arrival of the web, and the implementation of the Companies Act 2006 has greatly simplified the contractor company formation process.
Therefore, in order to set up a new limited company, you have to submit three pieces of information to Companies House, the registrar of companies in the UK.
What documents are required?
– Form IN01 – this form contains all the key information required to set up a company. It includes
o the proposed company name,
o the registered office address,
o details of the company‘s director(s) and secretary (if required),
o the number and type of shares you want to issue, and
o information relating to the company‘s shareholders.
– Articles of Association – this document outlines how the company will be run in practice. Most businesses opt to use new ‘model‘ articles, which are available from Companies House.
– Memorandum of Association – confirms the intentions of the company‘s subscribers to form the company in the first place. In practice, however, the importance of this document has been much diminished. That’s as a result of the Companies Act 2006.
How do you form a company?
There are three ways, therefore, that you can incorporate a new company:
– Directly, online via Companies House, for a one-off fee of £18. To use this new service, you will need to:-
o provide your company name and address,
o details of the company‘s officials, share capital and shareholder information.
You can opt for paper-based submission for £40.
– Via a Formations Agent – for a modest fee (anything from £30 to £100 typically), an intermediary will take care of all the administration work for you. So, once you have supplied the information required for Form IN01, they can set up your new company in a matter of hours.
– Via your accountant – a popular method for contractors. If you are just starting out as a contractor, a specialist accountant will be able to form your company. Furthemore, this will be either for free, if you sign up for their ongoing services, or for a one-off fee.
– Since 2008, the company secretarial role is an optional one.
– Once you have formed a contractor company, you can easily change the name, director and shareholder details, and registered office address.
– You should avoid ‘sensitive words and expressions‘ when choosing a name. You can‘t use trademarked or copyrighted words.
– Company officials can now provide Companies House with ‘service addresses. That’s‘ if you don‘t want your personal address to appear on the public record.
For dozens more guides to setting up a contractor company, try Company Bug