How to register a new company?

How to register a new company?

 

How to register a new company?

 

Note: This guide describes the process of UK limited company registration.

 

The countless number of companies are being registered globally every year. In the United Kingdom in the 12 months to the end of March 2017, there were 644,750 company registrations.

Registering as a company in the UK has never been so easy.

No paperwork, long waiting times or expensive fees.

There is no need for an accountant or lawyer for registering a company nowadays. Everybody (absolutely everyone in the world) can go online and register a UK limited company electronically in about 3 hours.

As company registration process is now super fast and simple, more and more people every day decide to incorporate.

The most popular corporate body in the UK is a private limited company. Since 2007, private limited companies have consistently accounted for over 96% of all corporate body types.

The major reason for this is that the Ltd perfectly meets the initial needs that new small and medium size businesses usually have. Limited companies provide protection to shareholders. They also provide access to all essential legal rights.

In this guide, we will walk you through the necessary steps for setting up a limited company in the UK. Moreover, we will describe every part of company registration process in detail. If you want to start your business journey with forming a UK company read on and see how quick and easy this can be.

 

Basically, in order to register a UK limited company you need the following:

  • An appropriate company name
  • UK address for the company
  • At least one director
  • At least one shareholder
  • SIC code (Standard industrial classification of economic activities) – this identifies what your company does

 

Let’s take a closer look at each step:

 

1. Do you need to register a company?

 

The mere fact that you run a business does not mean that you must form a company.

Depending on the circumstances operating as a sole trader can be a good option to the certain extent. However, there are specific differences between a limited company and sole trader that matter.

Usually, as your business grows you inevitably reach the point where you need to switch from sole trader to the limited company. Limited company registration, in this case, can be slightly different. You can read about the exact procedure in our previous article.

 

Related: How to Change from Sole Trader to Limited Company?

 

However, everything depends on your current position. If you feel like a limited company is the best option for you then it is a good idea to go ahead and register with Companies House.

2. Choose your company name

 

You need a unique name for your new UK limited company. This must be a name that has not been yet registered for another company.

However, this is not the only requirement for company names in the UK. For the successful company registration with Companies House, your new company name must meet specific requirements. Most of these requirements are generic, but it is a good thing to know them in advance. We suggest checking the full details of the acceptable company names before you start the company registration process.

 

Related: What Names Are Acceptable for UK Limited Companies?

 

On top of that, remember that a good company name is an invaluable asset. The great company name will always help you along the way.

 

Related: How to choose a great company name? (ranking table included)

 

As soon as you find the suitable company name you can check if it is available using our company name checker. This tool is harmonized with the Company House records and functions in real time. If your company name is available you can proceed and start forming your company right away.

Remember that you can use a different name for trading. Your trading name (also called business name) can be different from your registered company name.

Additionally, you need to take into account that you’ll need to register your trading name (business name) as a trade mark if you want to stop people from trading under your business name. You also can’t use another company’s trademark as your business name.

3. Company address

 

All UK companies must have an address in the UK. This is a mandatory requirement. You must provide the company address during the incorporation process. You need the company address for official communications, for example, letters from Companies House.

 

Below are the requirements for a UK company address:

  • It must be a physical existing address in the UK;
  • It must be in a country where you want to register a new company e.g. company registered in Scotland must have an address in Scotland;
  • You can use PO Box. However, you still need to provide a physical address and postcode.

 

If you want so, you can use your home address or even the address of the person who will be managing your Corporation Tax.

Remember, that your company address will be publicly available on the online register.

If you do not have an address in the UK or want to keep your home address private you can get UK address online here.

4. Appoint directors (and company secretaries)

 

UK limited companies must have minimum one director. Directors are legally bound to carry the load of running the company and ensuring company accounts/reports are accurately prepared.

The minimum allowed age for directors is 16. The director must not be disqualified.

Legal entity (another company) can be a director of UK limited company, but at least one of the company’s directors must be a person.

There is no requirement for directors to live in the UK (although companies still must have a UK registered office address).

Please note that directors’ names and addresses are also publicly available.

As for the company secretaries, there is no requirement to appoint them for a private limited company. But some companies appoint them to carry on some of the director’s responsibilities.

Even if there is an appointed company secretary, the directors are still legally responsible for the company.

If you register a company with us you can appoint the company director electronically during the company registration process.

5. Shares and Shareholders

 

Limited companies are usually limited by shares.

Shareholders hold the company shares and this allows them to control the company. The liability of each shareholder is limited to his/her shares in the company. This is exactly the way shares limit the responsibility of shareholders.

At least one shareholder must hold shares in the company limited by shares. This can be a director.

If there is only one shareholder, then he/she owns 100% of the company.

As for the maximum number of shareholders, there is no such limit currently in place.

You need to set the price of an individual share which can be any amount. There is no minimum share amount requirement for UK limited companies. Share amounts can be as low as £1 (by the way this is a popular choice and in most cases the reasonable amount to limit the shareholders’ liability).

During company registration process the information about the shares has to be provided. This is also known as “statement of capital”. The following information must be provided:

  • the number of shares, their types and value – known as the company’s ‘share capital’;
  • Shareholders (also known as ‘subscribers’ or ‘members’) details – their names and addresses.

 

You also need to set the class for shares. The class of the share defines the rights it gives to the shareholder. This is known as “prescribed particulars” and must specify:

  • the share of dividends it gets
  • share exchange (‘redeem’) details
  • vote details

6. Find your SIC code

 

Check what your SIC code is. SIC (Standard Industrial Classification of Economic Activities) code identifies what your company does. You can find the appropriate SIC code in the condensed version of the full list of codes provided by Companies House.

7. Memorandum and Articles of Association

 

Memorandum of association is a legal statement signed by all initial shareholders expressing their consent to register the company.

Articles of association are rules governing the process of running and operating the company. These rules are presented in a written form and agreed by the directors, the company secretary, and shareholders.

Both documents must be provided in order to register a limited company.

Usually, there is no need to draft these documents in a standard case. There is a memorandum of association template and model articles available for an immediate use. If you register your company with Mill you’ll have all these ready in our system for you. You can also draft your own articles of association, but if you do so you won’t be able to form your company online.

8. File the incorporation with Companies House

 

Once you have everything ready you can start the company registration process. This can be done in different ways:

  • You can register a new company online with Companies House. In this case, you must register a company that is limited by shares and uses standard articles of association.
  • You can register by post. This application takes between 8 to 10 days. There is also an option to register the company on the same day if you get your application to Companies House by 3 pm and pay £100. In this case, you must mark the envelope as “same day service” in the top left-hand corner.
  • You can register a new company online with us. This is the easiest option. You will get everything set up for you in our system and will be able to get your company registered with Companies House in just 3 hours (in most cases).

 

How much does it cost to set up a limited company?

The company registration cost depends on the method you choose:

  • Online company registration fee with Companies House is £12;
  • Company registration by post with Companies House costs £40 (You can pay this fee by cheque made out to Companies House);
  • Registering a company through our system costs £29 (Companies House fee is included).

 

9. Register for Corporation Tax

 

Once you have completed the company registration process you will receive the official “certificate of registration” (certificate of incorporation). This document is the proof that your company legally exists. It contains your official company number and date of incorporation.

After you company has been registered and is ready to trade you can register for corporation tax within 3 months of starting to do business. Starting to do business also includes buying, selling, advertising, renting a property and employing people. If you doubt whether you have started to do business or not you may consult this comprehensive resource to determine your position.

You can register for corporation tax online with HMRC.

10. Start trading with your newly registered company

 

Once you complete all mentioned steps you will have an officially registered UK company that is ready to trade.

We’ll be glad to hear your thoughts!
Please share them in the comments section below for us and our audience to read and benefit!

How to choose a great name for your new business/startup?

How to choose a great name for your new business/startup?

Name selection for your new business is an important and crucial process. This decision will influence your business throughout its entire lifetime.

It may sound easy, though. What a big deal in the end? You just starting out and any name will be good for now, right?

Well, not really.

As a beginner, you need to make use of every single opportunity to raise your chances to succeed.

Your business name is an another opportunity for you to get maximum out of it. Many people underestimate the importance of effective and “working” business name. They often do not believe that the business name, unless it is obviously abortive, can have a significant effect on their business results.

However, this is not true.

Business name is vital for success. It has an impact on your business identity, the first impression your customers get, your marketing, SEO and even legal stuff. Needless to say that these are serious things and you certainly do not what to mess them up.

Large corporations and big companies employ the naming agencies and spend significant amounts for their name selection.

Investing in your company name prior to business operations will save you money and time in a long run. Therefore, we recommend to take time and find the name that best suits your business.

So what would be a perfect name for your new business/startup?

Although there is no official set of rules that will help you come up with the exact name you need to use, there are certain things that you need to take into consideration.

Perform a Research

First, start with a thorough research. Identify your market and target audience. Your market primarily defines the requirements for your business name. If you have ready marketing strategy refer to it.

Do you aim to target teenagers, young moms or businesses? Those categories are significantly different. Do you need a business name that conveys credibility and quality? Maybe fun or creativity?  Or maybe you need the combination of two or three?

Your research will help you to outline the message your business name needs to communicate.

When you have the clear picture stick to it and make sure that the chosen name suits your market and is not extrinsic.

Brainstorm

As soon as you’ve done your research and have the idea of what you need start brainstorming. Often many forget about the power of brainstorming. You never know what brainstorming will bring you. It is quite possible that you’ll end up with “Aha!” effect having a number of amazing business names.

So, brainstorm the potential business names and make a long list. After your long list is ready start filtering it to create a short list based on the principles listed below.

Stand out

It is a good decision to choose a company name that will help you stand out from the crowd and will highlight your uniqueness. Consider your potential customers browsing through the directories. Your company name stickiness will often be decisive here.

Additionally, with a unique name it is easy to get remembered by customers and have repeated sales with them. If your name is sticky then there are chances that the customers will recall you and not your competitors when they need your service or product next time.

However, do not choose names that are too uncommon and apparently unclear. There is a level of uniqueness from which it starts to work against you as people simply do not understand your message or they experience troubles with reading and pronouncing it.

Keep it simple and short

Short and sweet names have always been an excellent choice. They are sharp and easy to remember. Experts reaffirm that company names that are shorter are much better. So, if possible, try to avoid names with more than one word. Use two to three syllables and avoid the use of special characters. It Is also a good idea to avoid abbreviations that don’t mean anything to other people.

Avoid Names that are hard to spell or pronounce

The next step is to find a name that is easy to pronounce. Using fancy foreign words that are difficult to pronounce should be avoided. People misspell unknown words and this is what you do not want to happen to your business name.

You may come up with such names while trying to stand out as per our advice above. That kind of names definitely stand out but for this reason, they also may be hard to spell or pronounce. So, you need to find your middle way here.

Foreign words (Italian or French for example) may be adorable and sound just beautiful, but do not let the temptation affect your neutrality. The mere fact that you like it does not make it effective as you are likely to be biased. You may be in love with uncommon foreign names, but keep your business objectives in mind and stay focused. Those names usually are not catchy without a prior knowledge of their meaning.

Choose a name that will stand first in alphabetical orders

This is actually one of the reasons why Steve Jobs and Steve Wozniak chose Apple as a name for their new company.

Many online and offline directories, phone books and other business databases divide companies alphabetically. Therefore, naming your company with a letter at the beginning of the alphabet will help you to be at the top of the list (leaving behind your competitors) at no extra cost.  This free advantage combined with the stickiness of your business name will leverage the power of business directories for your benefit.

Your name shall tell what you do

It is good if your business name actually tells what you do. This way it conveys the immediate and clear message of the nature of your service or product so you do not need to go into explanations or whatever. For example, many hair studios use salon in their names and therefore everybody knows what is their business about.

Avoid restrictive names

Your business name must have a potential to improve your image. The most important thing is to be sure how you want to be perceived by the market. This might seem like an easy task, but it isn’t.

Many people make the same mistake and choose names that are too restricting. When we say this we mean names that cannot be used in case you decide to expand your company in the future. A good business plan must include a strategy for growth and expansion and using a company name that sets limitations is not a smart choice.

For instance, if you choose a name like “Cotton Shirts”, you will find it difficult to include sweaters, hoodies, dresses and other things that are usually associated with shirts in your offer.

Or another example of a restrictive name is when it includes a specific geographical area. It will be hard for you to expand your business in London if your company name is “Birmingham Real Estates”. Many current global companies struggled from geographically limited business names and were forced to de-emphasize its regional nature. A great example is Kentucky Fried Chicken which is now KFC.

Use online tools

There are amazing online tools for the name selection out there. Try them to save your time and get better results. Play a bit with the names from your long list to find creative combinations. Here are some useful links for you to start off:

http://www.rhymezone.com/

http://www.rhymer.com/naming.html

Your business name should be available

If you have a great idea on how to name your business it does not automatically mean that it is available. There are few places you need to check your business name for availability.

Trademark

What is important when you are selecting your business name is to be proactive and sort out trademark issues beforehand. It is very likely that you can come up with an amazing name or even start to use it successfully but one day you’ll find out that it has been trademarked by another entity. This is highly unpleasant experience and might end up being fatal to your business.

So, it is of the highest importance to check whether the name you have chosen has been trademarked or not. Luckily, it can be done easily online in most countries. If this is not the case with your country, then check it with your local Trademark Office.

In case, your business name is available then it is recommended to register it as your own trademark and carry on your business activities in a risk-free manner.  For this, you need a spare budget to pay for registration fees or even hire a lawyer (if needed).

Trademark registration mainly depends on your individual circumstances. Compare time and cost of registration versus risks and then decide if you really need a trademark.

Many people do not register their trademarks until it is unavoidable. And they are fine. It is your decision and you take it on your own risk.

To make a long story short, it is highly recommended to register your business name as a trademark together with logo and any other intellectual property. This will save you time and money in a long run.

Domain Name

Another big and important concern can be your domain name.

As you are probably aware, online presence is a must for every business/startup today.

So, when you are choosing a name for your company, you should take the name of your website (your domain) into consideration. The best scenario it is when your business name matches your domain name.

However, there are literally millions of active websites out there and it is likely that the name you have on your mind is already taken. That’s why you should check whether the name is still available. So, make sure you arrange it in time.

Go to our search page and search for your potential business names. When you decide with your business name buy your domain name immediately. You never know who is currently searching for the same name among billions of internet users and how long it is going to be available. Domain names are very cost-effective at Mill, so there is no excuse for not having one (prices start from as low as $3.99 per year!).

Depending on the purpose and goals of your business/startup you may find top level domains different than .COM. Those sometimes are more attractive and they are usually more available.

Our search system includes tons of different top level domains, so just go and see what is there for you.

Create a ranking table

As a final step, we recommend using our ranking table to choose the best name for your business.

Take all the criteria listed in this article and create the points-based ranking table. Give points to short-listed names based on criteria and find the winner(s).

Find below free Google Doc with ready-made ranking table template.

Mill For Business - Name Ranking Table

BONUS TIP!

As a bonus tip, we recommend you to split your whole selection process into four simple steps:

  • First set criteria using this article

  • Brainstorm and create a long-list of potential business names

  • Filter names according to criteria and short-list them

  • Choose an amazing Business Name

As you can see, the name selection process requires some research and time, but in the end, you will know that your business has a unique name that will make you visible on the market and eventually bring you excellent outcomes.

Additionally, you can also check the availability of your UK company name in our Company Formation System. It is super quick, so you will have your results in seconds.

Further Reading: What Names Are Acceptable for UK Limited Companies?

Do you have something to add? We’ll be glad to hear!
Please share your thoughts in comments section below for us and our audience to read and benefit!

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