Contractor Question – How Do I Form a Ltd Company?…

Contractor Expert David Hughes from Accountants 4 Contractors replies…

There are several options available when forming a company and the easiest typically tends to be to use an Accountant to take care of the process and all paperwork for you. You can however form a company directly with Companies House if you have the time, or use a formation agent.

The steps you should consider:

Firstly it would be wise whichever way you are considering forming, for you to have a look at Company names that are available and this can be done by reviewing the Companies House webcheck service.

Leave all the boxes as they are and simply type in your proposed name with Ltd or Limited as well.

If you find that the name is already highlighted then this means that the name is already in use, so another name choice would be required.

You will then need to consider whether you want to get professional help to set the company up, or complete this yourself.

Paper or Electronic Formation?

In the event you are conducting the formation yourself you may choose to complete the paperwork and these would include:

* application form IN01 to register a company which includes the company’s registered office, type of articles, the names and addresses of its directors, statement of capital and initial shareholdings.

* Memorandum of Association giving the names of each subscriber and authentication that they have agreed to become members of that company.

* Articles of Association (unless the company adopts model articles in their entirety), describing how the company will be run, the rights of the shareholders, restricted objects if they have any and details of the directors’ powers

Benefits of Completing the Work by Different People

Yourself – if you want to own, manage and operate everything yourself then this may be a solution, however from my experience I often find that formations done in this manner are sometimes completed incorrectly.

Formation agent – they have experience in the formation process and can take a lot of the administration off your hands. These companies will have already taken time to draft Articles of Association which will save you time on this matter

Accountant formation – often Accountants will have secured significant discounts and pre agreed packages with formation companies and in completing these they can probably save you the hassle and more money too. Equally all the areas that the formation agent has worked hard on, such as the articles become part of the standard service for Accountants.

Timescales on Setting Up

Depending on how you form the company I would suggest that formation agents and Accountants will have the company registration all completed with relevant documents received (Certificate of Incorporation / M&A’s) within 24 hours. If this is done by post then this could take around a week.

Officer Requirements

You are no longer required to have a Company Secretary by law, so you can form a company with 1 person alone as the Director and Shareholder.

Once again it is always seeking some advice before forming the company to ensure that all of your professional and personal circumstances have been considered. This will therefore ensure that the company is formed in the best and most appropriate manner.

Shareholding

You can appoint 1 person as the shareholder and then allot 1 share to that person and that will be sufficient to start the company.

Registered Address

In the event you form this company yourself the Registered address would be your own.

If formed by an Accountant you often find that they will provide Registered address facilities, which is often the preferred solution so that you do not get inundated with post.

Author Bio: This article has been submitted by Contractor Mortgages Made Easy in association with http://www.accountants4contractors.com

Category: Business
Keywords: ltd company, limited company