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Client Service Manager, Global Solutions
05 February 2019
Read time
4 minutes

6 steps to incorporating a company in the UK

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.

1. Constitutional documents

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, signs, symbols: those outside the alpha-numeric series and punctuation are restricted (such as @ and #).
  • it is not offensive.
  • the name ends with ‘Limited’ or Ltd’ (or the Welsh equivalent).

3. Registered office

Your private limited company must have a physical address in the UK. This is where official communications will be sent, such as correspondence from Companies House and HM Revenue and Customs.

This address will be publicly available on the online register and will be the location where the public is able to inspect the statutory registers of the company, unless the company adopts a single alternative inspection location (SAIL).

The address should be displayed on all company stationery, including emails and websites. We can help you establish a registered UK office address – learn more.

4. First officers

The First Officers consist of the following.

  • Directors

A private limited company must have at least one director who is a living individual, at least 16 years of age and not disqualified from being a director.A corporate body can act as a director, but if a corporate director is appointed, there must be at least one director who is a natural person. It is advisable to have at least two directors to ensure continuity should one of them resign or be unable to act.

The Articles of Association usually contains provisions on how the directors should manage the company affairs and how the directors may exercise all the powers conferred by its members and in accordance with their fiduciary, common law and statutory duties.

To act for a UK company the directors do not need to reside in the UK. Upon incorporation, the name of the directors and their usual residential address must be filed at Companies House. The directors can choose to register a service address - which may be the same as the registered office address - so that their residential address is not available on the public record.

  • Company secretary

Whilst statute defines the administrative functions and duties of a company secretary, a private limited company is not required to appoint one unless the company’s Articles of Association expressly require it to do so. The company secretary may be an individual or a corporation.

5. Statement of capital 

This statement provides the details of the company’s share structure and value. There can be different classes of shares with different rights such as voting rights, dividend rights, capital rights and redemption rights. These will be detailed in the company’s articles of association.

6. Persons with significant control

Any person with significant control must be registered on incorporation. The purpose of this is to improve corporate trust and transparency by making it clear who ultimately owns and controls UK companies. This is intended to improve corporate behaviour, deter money laundering and help sanction those who those seeking to hide their ownership or control for facilitating illegal activities.

A person with significant control is an individual (person or registerable legal entity) who meets one or more conditions relating to share ownership, voting rights, appointment of directors, or rights to exercise or exercises control of the company.

Talk to us

TMF UK’s company secretarial team can help with the incorporation of your UK entity. We also provide local directorship, registered office and annual compliance services. We also can assist with a wide range of transactions, including changes of officers and share transactions.

Need more information? Contact us today.

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