On this web page I explain the preparation aspects and practicalities of creating a 'Private Limited Company by Shares', otherwise known as a LTD Company, which is the most common type of limited company in England (UK). In terms of the actual Company Formation Process Web Pageregistration process, you just need to visit an accountant. They will do everything for you online, within 30 minutes for example.
PLEASE NOTE - The information on this web page is meant for the 'average person in street' and NOT for wannabe 'big company executives' or people wanting to know the nitty-gritty of forming a Ltd Company and wanting to know about shares. If you need that type of information, please consult an accountant, lawyer and/or the business websites.
READ THE PREVIOUS SECTION - Be sure to read the 'Self-Employed' web page because it has valuable information on it that goes hand-in-hand with the information on this web page.
A 'Private Limited Company by Shares' is a Ltd Company that is owned by at least one director (YOU) and at least one shareholder (YOU, as a member of paid staff), with the intention of making a profit with that company's profession (i.e. profit made by a cleaning company). The company shares cannot be traded on the stock exchange, hence 'private' limited company, but I do not think this will matter to the 'average person in street' setting up 'Private Limited Company by Shares'!
NOTE - Certain non-British nationals are restricted as to what work they can do in England (UK), depending on their visa, work permit, training and English language level, among other things.
Although a 'Private Limited Company by Shares' is normally created for tax reasons, to employ staff and/or for those making money with a good profession, it is sometimes a good idea to set up a 'Private Limited Company by Shares' as Dormant (non-Active / non-Working) just in case you need it later. This is good if you want/need to test out your business idea first as a self-employed person or small business and then operate as an active 'Private Limited Company by Shares' later, when you become more successful.
Example: If you start business as a self-employed Cleaner, perhaps cleaning private houses and a few offices each week, your small self-employed cleaning business might grow big enough in a couple of years whereby you then need to activate your dormant 'Private Limited Company by Shares', quit self-employment and work as XYZ Cleaning Ltd for example.
With the above scenario it is wise to register a 'Private Limited Company by Shares' at the same time as you become self-employed, if you can afford to, purely to protect your business name. You would not want to become famous in your town/city as a self-employed cleaner whereby two years later, when you want to set up as a Ltd Company and therefore register your business name with Companies House WebsiteCompanies House, you find out that someone one year earlier already registered your business name; therefore preventing you from using it. Use the Companies House Companies House Search Web PageSearch Engine to see if you desired business has already been registered.
Ironically, a Ltd Company business can ask you to stop trading if you have the same business name as them. Obviously, it would be a matter for the courts if you set up your business name, as a self employed person or small business, years earlier. Hence, one reason why these days you cannot have the same business name as the computer retailer PC World for example - You might be able to use Peter Calvin World, but if you started trading as PC World that would be a different scenario completely. I am sure PC World's lawyers would like to speak to you!
Every 'Private Limited Company by Shares' MUST be registered with Companies House, either in person or online, and more importantly MUST have a unique Business Name Advice Web PageBusiness Name (as mentioned above) that is suffixed with Ltd.
This means your unique business name can be your own name (i.e. John Cairns Ltd), include your own name (i.e. John Cairns Cleaning Ltd) or just be a standard business name (i.e. XYZ Cleaners Ltd), but it can NOT be exactly the same business name as another registered company's name in Britain (England & Wales).
If you have a Ltd Company in England (UK) it must have a Registered Address, such as a house address, office address, shop address or even your
accountant's address. Furthermore, your limited company's name MUST be displayed on a sign that is easy to read and see at any time at your
registered company address (normally outside, near the main entrance of the registered address) and wherever your business operates. However,
Registered Address Requirementsyou do NOT need to display a sign if you run your business from home.
On business stationery and promotional material, you MUST include your limited company’s name on all company documents, publicity and letters. For example: On business letters, order forms and websites, you MUST show your limited company’s Registered Number, Registered Office Address, Registered Location (England and Wales, Scotland or Northern Ireland) and the fact that it is a limited company (normally by using your limited company's full name with the suffix ‘Limited’ or ‘Ltd’; such as John Smith Ltd or John Smith Limited). Business Invoice RequirementsInvoices have different requirements.
If you have registered your home address as your registered company address, perhaps because you work from home as a massage therapist for example, whereby you do not want everyone on the internet for example knowing your home address, you may want to use a Virtual Office for business stationery and website purposes. The same applies if you perform outcall services, such as a plumber, mobile hairdresser, computer repair person or massage therapist. A virtual office is also applicable and ideal if your home address is in a residential area, as opposed to a business area, and/or if your property has a stigma attached to it (such as being a council flat).
A Virtual Office is a real office address, usually located in an excellent part of town and owned by a big company (such as W1 Office WebsiteW1 Office), that you can use as your registered office; for a fee. So instead of using your council flat address located in a bad area, you could make out you have an office in the heart of the city centre for example.
As implied above: Plumbers, Massage therapists, Computer Engineers and Mobile Hairdressers for example may prefer a virtual office because it gives their company a prestigious location. They can promote 'We operate within a 5-mile radius of the city centre', as opposed to 'We come from a bad part of town in the south, so we do not operate in the north because it is too far'. You get my point! The class system in England (UK), more so in London, often means using a virtual office in order to get, better paid, jobs and better clients (i.e. more regular work).
The company operating a virtual office usually offers services such as Mail Forwarding (they post letters from the registered office to your home address), Phone Answering (secretary switchboard) and Meeting Room Hire at a much lower cost than you hiring a private office with secretary for example. In London a very small office space might cost you £600 upwards per month without a secretary, versus a virtual office for £250 upwards per year with a mail forwarding service.
I have used W1 Office and they are very good. Once you sign up with them they will ask you for two forms of identification, which can be e-mailed, whereby they then register you with Westminster council. This has its own advantages when wanting to use a Westminster borough (district) facility whereby you are asked 'Do you live or work in Westminister?'; before you can use that facility. Having a prestigious Westminster address as your registered business address is also an advantage, as it the right to use it on your website and business stationery.
At this point you should have prepared your business:
Assuming you are prepared, your final step should be to ask your accountant to register a 'Private Limited Company by Shares' in your name. They should then ask you for your Passport, or Driving Licence, and at least one 'Proof of Address' (such as a Utility Bill), which they will more than likely photocopy for their own records and for HMRC purposes.
Once they have gone online, registered your 'Private Limited Company by Shares', asked you to sign any relevant declarations and charged you a fee, you just wait for your official incorporation documents to be sent in the post. When you receive them, sign any paperwork that needs signing and keep those documents safe. Your unique Business Number will also be documented - It should be printed on any paper or e-mailed invoices your issue.
NOTE WELL - You should have a Registered Address (registered business address) BEFORE your accountant registers your new 'Private Limited Company by Shares', otherwise they will have to put your home address for example on the online registration/application form.
As your registered business address will be made public, by law, and because it is difficult to remove from the internet thereafter, and difficult to have changed in general, I would strongly recommend getting a real business office or virtual office space beforehand. Once registered, you can use the Companies House search engine (linked at the top of this web page) to see the listing for your particular ltd company.
NOTE: If you become self-employed on 6th April and then register a dormant ltd company in December for example, you will be hit by two tax returns; one for each entity. However, if you do both at the same time your accountant should charge you less. An accountant doing your annual self-assessment for your active ltd company could be £700 upwards, compared to £150 for a dormant company.