Thursday 23 February 2012  

Getting Started

Limited Company set up

If you intend to set up a limited company then this short guide will tell you what you need to do to get started.

The guide covers setting up a private limited company which is the type that the majority of users will be interested in. If you want to know about any other type of limited company e.g. private, limited by guarantee etc then we suggest that you will need to seek professional advice to help you through the process.

Getting Started

There is a formal legal process which needs to be followed to set up a limited company.

You can do this yourself, if you know how but there are a plethora of what are known as company formation houses around who will do this for you at a very cheap price.

Unless you are very experienced a formation house would be the best route to go to ensure that the set up is correct.

Share Capital

A company is owned by the share holders and when formed it should have at least one share issued.

The shareholders' liability to the debts of the company are limited to their investment in the company i.e. how much they agreed to pay for the shares (unless of course they give personal guarantees on the debts). Hence the term limited liability.

Documents Required

On formation of the company several documents have to be filed. The formation house will take care of these but it is worthwhile being familiar with the terms:

Memorandum of Association

This contains:

Articles of Association

This sets out the rules for the running of the company's affairs.

Form IN01

This gives details of the first director(s), secretary and the registered office address.

Every company must have at least one director.

It is no longer necessary for a private company to have a secretary.

It also includes a statutory declaration that all the legal requirements relating to the formation of the company have been meet.