Company formation can be identified as the process of registering your new business as a limited company, so that it finally becomes a unique legal entity. You can also call it company „incorporation” or „registration”. After registering your limited company, it becomes an individual entity in the eyes of the law.
Roughly, the only reason to register a limited company is to cut down the financial responsibility of its owners. This process is called ‘limited liability’. It means that your private company will be limited by shares or limited by guarantee. The owners of a limited by shares business are accountable just for the value of their shares. The same stands for their guarantees.
In addition to the financial benefits mentioned above, limited company formation creates a professional corporate image of an established and reliable business that allows you to attract lenders, investors, suppliers, and clients.
Therefore, registering your business as a limited company is a practical and affordable way to multiply the potential of your business, reach a wider audience and benefit from more favourable tax rates.
Now let’s get down to the topic itself!
Did you know that company formation is amazingly simple? It requires only one person that can accomplish the whole process online through an electronically delivered application! Usually, Companies House grants you the approval within 3 hours.
To register your private company (limited by shares or guarantee), you need:
- A verified, unique business name;
- At least one director and one shareholder (which can be the same person);
- A registered office address in England, Scotland, Wales or Northern Ireland;
- Share capital of at least one issued share;
- Up to four Standard Industrial Classification (SIC) codes that describe the companie’s activity;
- Memorandum and articles of association (governing documents);
- Information regarding the Company’s Register of Persons of Significant Control.
Sometimes, your application can be rejectected because of a number of errors. All of them can be easily avoided if you’re being careful. First of all, remember to check the availability of your company name before submitting your application. Furthermore, be sure to send all the documents at once. If you forget, you’ll have to electronically send additional documents to Companies House. All being well the second time around, your new business should be approved and ready-to-trade within 3-6 working hours.
What documents would you need for company registration? If you choose to open up an offshore company through a formation agency, you won’t have to submit any paperwork or deal with any physical documentation. If you decide to use the registration services provided by Companies House, you will have to complete a form named IN01, and send it via email or by post.
As soon as your company formation application is approved, you can start working. If starting isn’t an option at the moment, you can also make your company dormant.
What makes a company active?↓
- Trading or professional business activity.
- Earning income
- Selling or buying goods for the sake of profit.
- Employing people
- Providing services.
- Purchasing or renting property.
- Managing investments
Now what about new business partners after company formation? Bringing in a new partner can be a very good decision, especially if you’re running your company alone. It can help you raise additional capital, expand your business and share the responsibility and financial liability with a friend and trustee. Still, before you appoint a new director or bring in new shareholders, you check that the person has the necessary proficiency and dexterity to manage all the crucial aspects of the company.
Make sure the new employee understands your company’s values and development direction, see if you get along well and if you’ll be able to collectively maintain the overall control in your business.
Thus, before making any commitments, we strongly recommend consulting a legal expert, because getting rid of someone who already has a financial stake in your business will just get you more into trouble. The right partner could be the megamind of your business, but the wrong one could kill it in mere days!
If you’re looking for the perfect legal and company formation expert, don’t be shy, contact us right away!
Bizonaire will help you register your offshore company in no time and with no paperwork!
