Incorporating a New Company

  1. What is Incorporation?
  2. Who can incorporate a company?
  3. Is there more than one type of company?
  4. How do I incorporate my company and what fees apply?
  5. What documents are required to incorporate my company?
  6. Can I reserve my proposed name?
  7. What is included in the ‘Application to register a company (form IN01)’?
  8. What is the memorandum of association?
  9. What are the articles of association?
  10. What are model articles?
  11. Where can I find further guidance on the memorandum and articles of association?
  12. Are there any model articles for unlimited companies?
  13. Do I need to notify Companies House if I change my articles?
  14. What are entrenched or restricted articles?
  15. Where can I obtain articles which are appropriate for my company?
  16. What is the registered office?
  17. What happens to the company incorporation documents sent to Companies House?
  18. What is the certificate of incorporation?

1. What is Incorporation?

Incorporation is the process by which a new or existing business registers as a limited company. A company is a legal entity with a separate identity from those who own or run it. The vast majority of companies are limited liability companies where the liability of the members is limited by shares or by guarantee.

A business cannot operate as a limited company until it has been incorporated at Companies House under the Companies Act 2006. Establishing your business as a company means the directors are required to file certain documents every year such as annual accounts and an annual return. They must also inform Companies House about any changes, such as the appointment or resignation of directors or a change to the company’s registered office.

It may be worthwhile seeking professional advice from a solicitor or accountant before deciding whether an incorporated company is the best way for you to run your business.

2. Who can incorporate a company?

One or more persons can form a company for any lawful purpose by subscribing their names to a memorandum of association . In law, ‘person’ includes individuals, companies and other bodies. By completing the memorandum the subscribers are confirming their agreement to form a company.

3. Is there more than one type of company?

There are four types of company:

  1. Private company limited by shares:
    This company has a share capital and the liability of each member is limited to the amount, if any, unpaid on their shares. A private company cannot offer its shares for sale to the general public.

  2. Private company limited by guarantee:
    This company does not have a share capital and its members are guarantors rather than shareholders. The members’ liability is limited to the amount they agree to contribute to the company’s assets if it is wound up.

  3. Private unlimited company:
    An unlimited company may or may not have a share capital but there is no limit to the members’ liability.

  4. Public limited company:
    A public company has a share capital and limits the liability of each member to the amount unpaid on their shares. It may offer its shares for sale to the general public and may be quoted on the stock exchange.

4. How do I incorporate my company and what fees apply?

There are three ways to incorporate a company.

Electronic Software Filing

Electronic incorporations can be submitted electronically through suitably enabled software. However, many incorporation agents and software providers have developed their systems to the point where they are able to offer customers a web-based electronic service (this is chargeable). This means that occasional as well as regular customers can apply for incorporation.

Many of the businesses shown on the Companies House list of software suppliers provide web-based services and depending on the volume of filings you anticipate making, it may be more practical for you to use their services. You can find more information about software filing and a list of providers on the Companies House website.

The standard fee for electronic filing is £14 (or £30 for the ‘Same-Day’ service for applications received by 3pm Monday to Friday). Straightforward applications are normally processed within 24 hours.

Web Incorporation Service via Business Link

Web Incorporation is the safe and reliable way to file online, enabling you to quickly and easily incorporate your company. The standard fee for Web Incorporation is £18. There is no same day service and currently only applications for a private company limited by shares adopting model articles in their entirety with a proposed non sensitive name can use this service.

Paper filing

Paper documents, which must be sent to the appropriate office, take longer to process than electronic documents. The standard registration fee is £40 (or £100 for the ‘Same-Day’ service for applications received by 3pm Monday to Friday).The fee is £20 (or £100 for the ‘Same-Day’ service) in the following circumstances:

  • your company’s registered office is stated as being situated in Wales (“Welsh company”) and you file documents in the Welsh language;
  • your company is a Community Interest Company (the total fee will be £35 including the CIC Regulator fee and there is no same day service); or
  • your company is an unlimited company.

Cheques should be made payable to Companies House. Straightforward applications are normally processed within 5 days of receipt. When filing ‘Same Day’ applications by post, courier or by hand please ensure that you clearly mark the envelope “Same-Day Incorporation”.

5. What documents are required to incorporate my company?

To incorporate your company you must file the following documents:

You may not be able to incorporate your chosen company name if it is the ‘same as’ another name appearing on the registrar’s index of company names. There is an exception to this if an existing company (or LLP or other body on the index) is part of the same group as your company and consents to the use of your proposed name (see Choosing a company name).

6. Can I reserve my proposed name?

No. You cannot reserve a name. Companies House cannot guarantee to process applications in strict order of the time or date of their receipt and in general electronic documents are processed more quickly than paper documents.

7. What is included in the ‘Application to register a company (form IN01)”?

This form requires the following information:

  • the proposed company name; the situation of the company’s registered office (‘RO’) i.e. whether it is in England and Wales, Wales, Scotland or Northern Ireland;
  • the address of the RO (which must be the same as the situation of the RO);
  • whether the company will be private, public or unlimited ;
  • choice of articles of association;
  • details of the proposed director(s), and the secretary if it has one;
  • directors’ service and residential addresses;
  • a statement of capital and initial shareholdings or a statement of guarantee;
  • whether a company limited by guarantee wishes to apply to be exempt from the requirement to use “limited” or “cyfyngedig” in its name (see Choosing a company name);
  • if the proposed name contains a sensitive word and a section requiring confirmation that you have requested the views of a government department or other body (see Choosing a company name);
  • a statement of compliance or guarantee.

8. What is the memorandum of association?

The memorandum of association confirms the subscribers’ intention to form a company and become members of that company on formation. In the case of a company that is to be limited by shares, the memorandum will also provide evidence of the members’ agreement to take at least one share each in the company.

Under the Companies Act 2006, the memorandum is a much shorter document because all the constitutional rules of the company are contained in the articles of association . Consequently, the memorandum serves a more limited purpose and once the company has been incorporated, it cannot be amended.

Information on capital and shareholdings is no longer part of the memorandum as it is contained in the application to register (form IN01) as a ‘statement of capital and shareholdings’ or for a company limited by guarantee, a ‘statement of guarantee’,

The required memorandum wording is included in the The Companies (Registration) Regulations 2008 (2008/3014) and you should use this format when preparing your memorandum. You can also download a proforma memorandum from the Companies House website. Please note, the wording of the memorandum is prescribed and it cannot be amended in any way. If you add or change the wording your application will not be accepted.

9. What are the articles of association?

A company’s articles of association are its internal rulebook, chosen by its members. Every company is required to have articles, which are legally binding on the company and all of its members. The articles help to ensure the company’s business runs as smoothly and efficiently as possible and will set out how decisions are taken by the members and directors as well as various matters connected with the shares.

The articles cannot contain rules that are against the law. Provided the members observe this general principle they have complete freedom to choose which rules are included in the company’s articles, although they may find it convenient to rely on model articles as a default position. If the members decide to draw up their own rules as bespoke articles they may wish to obtain professional advice before proceeding.

On incorporation your company can adopt model articles in entirety, model articles with amendments or it can draft its own bespoke articles.

10. What are model articles?

Although the members can determine their own articles, they can also choose to adopt standard model articles set out in legislation. You are not obliged to adopt the provisions of model articles, but they are suitable for most standard companies, provide useful guidance and in some cases provide a safety net. They are available for private companies limited by shares, private companies limited by guarantee and public companies.

The model articles are set out in schedules 1-3 of The Companies (Model Articles) Regulations 2008 (SI No. 3229) . They can also be found in the FAQs on the Companies House website.

When you complete the ‘Application to register a company (Form IN01)’ you will need to specify if the proposed company is adopting:

  • model articles in their entirety (they should not be filed with application form IN01);
  • model articles with amendments (only the amended articles should be filed with the form IN01); or
  • bespoke articles (copy of the articles must be filed with the form IN01).

If you do not indicate which articles you are adopting, we will automatically apply the model articles appropriate to your company type.

11. Where can I find further guidance on the memorandum and articles of association?

You can find very useful information in the guide, ‘Companies Act 2006 final implementation – changes to constitutional documents, including model articles: a summary of what the new approach means.

12. Are there any model articles for unlimited companies?

No. There are no model articles provided for unlimited companies. However, an unlimited company can choose to use model articles as the basis of its own articles of association. The articles must not include the provision for the liability of the members to be limited and the members should consider including an article containing power for an unlimited company by special resolution to increase or consolidate share capital, subdivide or cancel shares or reduce share capital and any share premium account. If you are thinking of incorporating an unlimited company you may wish to obtain professional advice.

13. Do I need to notify Companies House if I change my articles?

Yes. Once your company is incorporated, you must notify Companies House every time your company makes changes to its articles. You and your company may commit an offence if you do not do so. You can amend your articles by special resolution and deliver a copy to Companies House within 15 days of the date it is passed. You must also deliver a copy of the amended articles within 15 days of the date the amendment takes effect. It will help us if you file both at the same time.

Further information about what you need to do if you amend your company’s articles can be found in Companies House guidance, Life of a Company – Event Driven Filings GP3 .

14. What are entrenched or restricted articles?

Your company may choose to adopt articles which include restricted provisions which can only be repealed or amended if certain conditions are met. For example, a rule which can only be changed with the support of a higher majority of shareholders than the 75 per cent that would be required to pass a special resolution.

If your company’s articles include any entrenched provisions you must complete the appropriate section of the ‘Application to register a company (Form IN01)’. The articles themselves must make it clear what conditions need to be satisfied in order to change the entrenched provisions in question.

15. Where can I obtain articles which are appropriate for my company?

Companies House cannot supply bespoke articles of association but you can purchase them from a company law stationer or formation agent. Alternatively, you can find model articles for your company on our website

16. What is the registered office?

Every company must have a registered office. The registered office must be a physical location where notices, letters and reminders can be delivered to the company. The registered office does not need not be the place where the company carries on its day-to-day business so it could, for example, be your accountant’s address. If the address is not effective for delivering documents, the company could risk being struck off the register or wound up by a creditor.

If any person you deal with in the course of your business requests in writing the address of your registered office, or the location where they can inspect your company records, or details of the records that you keep at your registered office, you must respond within five working days.

When you apply to incorporate your company you must state whether your company’s registered office is to be situated in England and Wales, in Wales (a “Welsh” company), in Scotland or in Northern Ireland. The address of your registered office must also be in the same country as its situation.

If you decide to change your registered office address, you must file a ‘Change of registered office address’ form AD01. The change is not effective until we register the form, which can be filed electronically as well as on paper. You can change the address of your registered office but you cannot change its jurisdiction. For example, if your registered office is in Northern Ireland you cannot change it to an address in Scotland.

17. What happens to the company incorporation documents sent to Companies House?

We will carry out a number of examination checks including one necessary to ensure proposed officers are not on the Disqualified Directors Register maintained by Companies House.

If the documents satisfy all the appropriate examination checks, we will incorporate the company, issue a certificate of incorporation and place the documents on the company record for public inspection. Please note the incorporation does not take effect until Companies House has issued the certificate of incorporation. You should bear this in mind before obtaining company stationery or creating bank accounts.

18. What is the certificate of incorporation?

The certificate of incorporation is conclusive evidence that the requirements of the Companies Act 2006 as to registration have been complied with and that the company is duly registered under this Act. The certificate will state:

  • the name and registered number of the company;
  • the date of its incorporation;
  • whether it is a limited or unlimited company, and if it is limited whether it is

limited by shares or limited by guarantee;

  • whether it is a private or a public company; and
  • whether the company’s registered office is situated in England and Wales,

Wales, Scotland or Northern Ireland.

The certificate must be signed by the registrar or authenticated by the registrar’s official seal.

Fees stated are correct as at 01/2012

This business advice article subject to Crown Copyright © 2013

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>