Forming a New Limited Company - Private Ltd Company Formation FAQs

There are four main types of company:

• Private company limited by shares - this type of company has a share capital and the liability of each member is limited to the amount unpaid on shares that a member holds. A private company cannot offer its shares for sale to the general public.
• Private company limited by guarantee - in this type of company, members do not make any contribution to the capital during its lifetime as they do not purchase shares. The members' liability is limited to the amount that they each agree to contribute to the company's assets if it is wound up.
• Private unlimited company - this type of company may or may not have a share capital and there is no limit to the members' liability. Because there is no limitation on members' liability, the company has to disclose less information than other types of company.
• Public limited company - this type of company has a share capital and, the liability of each member is limited to the amount unpaid on shares that a member holds. A public limited company may offer its shares for sale to the general public and may also be quoted on the stock exchange.

The first three company types described above are forms of private company .There are still a few "companies limited by guarantee with a share capital". It has not been possible to form these since 1981 and this guidance does not deal with them.

Companies' legislation generally allows one or more persons to form a company for any lawful purpose by subscribing to its memorandum of association. However, a public company or an unlimited company must have at least two subscribers (this rule will disappear when the Companies Act 2006 comes fully into force on 1 October 2009).

You can find information about companies formed by a single person in chapter 3. (In law, 'person' includes individuals and companies).

Ready-made companies are available from company formation agents whose names and addresses appear in business directories. If you form a company yourself, you will need to send the following documents, together with the registration fee (see question 16 below) to Companies House:

• A memorandum of association
• Articles of association (except where Table A is adopted without modification - see question 8);
• A completed Form 10; and
• A completed Form 12

Information about each of these documents is set out below. If you want the company's registered office (see question 8 below) to be in England or Wales, you should send them to Companies House in Cardiff. If you want it to be in Scotland, you should send them to Companies House in Edinburgh. (See Companies House addresses at the end of this guidance.)

This is a written document, which sets out:

• the company's name;
• whether the registered office of the company is to be situated in England and Wales (i.e. it may be situated in either), in Wales (i.e. it may be situated only in Wales) or in Scotland;
• what the company will do (its objects). The object of a company may simply be to carry on business as a general commercial company;
• where applicable, that the liability of its members is limited;
• where applicable, the amount of share capital with which the company proposes to be registered and details of the division of those shares into fixed amounts; and
• in the case of a public limited company, a statement that it is to be a public company (see chapter 2 below).

Each subscriber must sign the company's memorandum in front of a witness who must also sign this document before sending it to Companies House. In the case of a company limited by shares, each subscriber must take at least one share in the company and the number of shares that each subscriber takes must be written against the relevant subscriber's name.

The form a memorandum should take is set out in Regulations which we explain in question 6 below.

This document sets out the rules for the running and regulation of the company's internal affairs.

Each subscriber must sign the company's articles of association in front of a witness who must also sign the document. A complete set of articles of association is provided for in Regulations. The articles for companies limited by shares are referred to as 'Table A' and there are separate versions in the Regulations for private and public companies.

A company limited by shares can choose whether to:

• adopt Table A in whole or in part as its own articles of association;
• adopt Table A with modifications; or
• adopt their own articles.

The requirement for a new company to send a copy of its articles of association to Companies House does not apply to a company limited by shares that decides to adopt Table A without any modification. However, this decision must be confirmed in a letter attached to the application to form a company.

A public company must appoint at least two directors. A private company can appoint one director provided this is set out in its articles (see question 12).If a company�s articles allow the appointment of one director it is adopting a modified version of Table A and in these circumstances it would need to deliver the articles with the application to form the company.

The Regulations also set out other forms of articles of association, which a company limited by guarantee (Table C) and an unlimited company (Table E) must adopt. These types of company must adopt the articles of association in those forms, or as close to those forms as possible. They cannot adopt totally different articles.

Please note, there are specific requirements relating to Memoranda and Association for Community Interest Companies (CICS), Right to Manage (RTM) Companies and Commonhold Associations. These can be found:

• For Community Interest Companies (CICS) in 'The Community Interest Companies Regulations 2005' (Statutory Instrument 2005/1788). Sample Community Interest Companies' memoranda and articles of association can be found on the CIC regulator's website at www.cicregulator.gov.uk.
• For Right to Manage (RTM) Companies which must be limited by guarantee in 'The RTM Companies (Memorandum and Articles of Association (England) Regulations 2003' (Statutory Instrument 2003/2120) or 'The RTM Companies (Memorandum and Articles of Association (Wales) Regulations 2004' (Statutory Instrument 2004/675 (W.64));
• For Commonhold Associations, which must be limited by guarantee in the relevant source of memorandum and articles for RTM companies set out in 'The Commonhold Regulations 2004' (Statutory Instrument 2004/1829)

Companies House cannot supply memorandum and articles but you can purchase them from a law stationer or company formation agent. Alternatively, you may prepare them yourself from the Regulations referred below. However, if the company is limited by guarantee or an unlimited company it must use those Regulations.

Although this guidance should not be seen as a comprehensive guide to this subject, the key regulations dealing with memorandum and articles of association and the companies to whom they apply are summarised below:

• The Companies (Tables A to F) Regulations 1985 (Statutory Instrument 1985/805), which contain the following information:
  • - Table A - Articles of association for a company (in two versions, public and private) limited by shares;
  • - Table B - A memorandum of association for a private limited company;
  • - Table C - A memorandum and articles of association for a company limited by guarantee without a share capital;
  • - Table D - A memorandum and articles of association for a company limited by guarantee with a share capital; (please note companies of this sort can no longer be formed);
  • - Table E - A memorandum and articles of association for an unlimited company with a share capital; and
  • - Table F - A memorandum of association for a Public Limited Company; -Table F

These regulations have been amended by:

• The Companies (Tables A to F) (Amendment) Regulations 1985, (Statutory Instrument 1985/1052);
• The Companies Act 1985 (Electronic Communications) Order 2000 (Statutory Instrument 2000/3373);
• The Companies (Tables A to F) (Amendment) Regulations 2007 (Statutory Instrument 2007/2541);
• The Companies (Tables A to F) (Amendment) (No.2) Regulations 2007(Statutory Instrument 2007/2826); and
• The Companies (Tables A to F) (Amendment) Regulations 2008 (Statutory Instrument 2008/739).

Tables A, C and E as recently amended can be found in the BERR website at www.berr.gov.uk/files/file45416.doc.

Amendments to the Tables in the Regulations apply only to companies formed on or after the date on which the changes come into force. They do not affect the articles of association of companies formed before these dates even if those articles are Table A, C or E without modification. If an existing company decides to adopt some or all of the provisions in an amended Table it will need to pass a resolution to make these changes and file a copy of the resolution at Companies House along with the revised articles.

Form 10

Private companies no longer need to have a company secretary, although they can insert a provision requiring a secretary in their articles of association. If you are forming a private company and you do have this requirement you should complete the secretary details on the Form 10.

All public companies must continue to have a qualified company secretary - see Chapter 2 question 4.

This is the official address of the company and the address to which Companies House will send notices, letters and reminders. The registered office must be:

• in England and Wales (if your company is registered there);
• in Scotland (if your company is registered there) ; or
• in Wales if your memorandum of association says that the registered office must be there (see question 4 above).

The registered office must always be an effective address for delivering correspondence and documents to the company. To avoid delays or other problems we strongly advise you to deal with all correspondence sent to this address promptly. If your company wishes to change its registered office address after formation, you must notify Companies House of the new address on Form 287. Until Companies House has entered this form onto its database the change does not take effect.

Companies House uses the Post Office address database to verify addresses. To avoid delays please ensure you are using the correct address including full post code on all forms and documents sent for registration.

All private companies must appoint at least 1 director unless the company's articles of association require more than 1 director.

A private company does not have to appoint a company secretary unless the company�s articles of association expressly require the company to have one (see questions (5) and (6) above).

A public company must have at least 2 directors and 1 secretary who must be formally qualified, (see chapter 2).

From 1 October 2008 all companies, whether private or public, must on formation have at least one director who is a natural person, i.e. an individual (see question 10).

All company officers have important responsibilities in law. The key requirements are set out in Companies House 'Directors and Secretaries Guide' available on Companies House website at www.companieshouse.gov.uk

After the company has been formed, you must notify Companies House about:

• the appointment of a new officer (Form 288a);
• the termination of an appointment of an officer of the company (Form 288b);
• changes in an officer's name or address or any of the other personal details originally registered on Form 10 (Form 288c); and/or
• any change in the registered office address (Form 287).

You can notify Companies House of any of the above changes online via Software Filing (requires software package) or WebFiling. You can also send documents to us by post � (see chapter 7). Please note, we do not accept documents or forms sent by fax.

Generally it is up to the members to appoint the people they believe will run the company well on their behalf. The only restrictions that prevent anyone becoming a director are:

• they must not have been disqualified from acting as a company director (unless the court has given them permission to act for a particular company);
• they must not be an un-discharged bankrupt (unless they have been given permission by the court to act for a particular company);
• they must not be under the age of 16 (from 1 October 2008); and
• at least one director must be a natural person, i.e. an individual (from 1 October 2008).

From 1 October 2008 the minimum age requirement applies to the whole of the United Kingdom, and any person who has not reached the age of 16 will cease to be a director. Companies House will put a notice on the public register to show that the appointment has ceased. The company will have to amend its register of directors to show that the appointment has ceased. If the company is left without an eligible director it will be in default and will need to appoint at least one director.

Certain people who are not British or of other EEA nationality are restricted as to what work they may undertake while in this country. If you need more information about whether such a person can become a director of a UK registered company, contact:

Home Office Immigration and Nationality Department
Lunar House
Wellesley Road
Croydon
CR9 2BY

(Tel: 0870 606 7766)

Form 12 is a statutory declaration of compliance which confirms that all the legal requirements relating to the formation of a company have been complied with. The form can be signed by the solicitor who is forming the company or one of the people named as a director or secretary of the company on Form 10, can sign it.

The requirements for completing Form 12 are:

• be signed by a director or show clearly that the person signing has signed on behalf of a corporate director. If this is unclear the form will be rejected;
• be signed in the presence of a suitably qualified person, for example a commissioner for oaths, a notary public, a justice of the peace or a solicitor;
• be signed and dated after all the other documents have been signed and dated.

Community Interest Companies (CICS) are a type of limited company designed for people who want to conduct a business or other activity for community benefit and not purely for the benefit of the members of the company. The CIC Regulator must approve applications to form a CIC and has a continuing monitoring and enforcement role.

A company cannot become a CIC if is, or intends to be, a political party or a political campaigning organisation (or a subsidiary of either). In addition, a CIC cannot be a charity.

To apply to form a CIC you must complete Form 36 (in addition to the documents listed in question 3 above) which you can download from the CIC website at www.cicregulator.gov.uk. The CIC website provides comprehensive information about the benefits of forming a CIC as well as details of the tests required for approval to become a CIC .

No. There are restrictions on your choice of company name.

Companies House will not register a name that:

• is the same name as another name on the register;
• contains a word or words, the use of which would constitute a criminal offence; or
• is likely to be considered offensive.

In addition, Companies House will not register names that imply a connection with national or local government without the support of the specific government department or local authority. Some words will require the permission of the Secretary of State or some other specified body before you can use them.

You should also check whether your chosen name is 'too like' any other names already on the register. If your chosen name is too like another name, the Secretary of State could direct you to change the company's name. For more information on names please refer to Companies House 'Company Names' guidance at www.companieshouse.gov.uk

Before you apply to form a company it is important to check that the name you want for your company is acceptable. Further information can be found in Companies House 'Company Names' guidance at www.companieshouse.gov.uk.

From 1 October 2008 the Companies Act 2006 introduces new provisions allowing any person or company to object to a company name for "opportunistic registration" if the company's name:

• is the same as a name associated with the complainant in which he has goodwill; or
• is so similar that its use in the United Kingdom would likely to mislead by suggesting a connection between the company and the complainant.

Please note, Companies House cannot deal with any complaints about opportunistic registration. Objections and enquiries should be directed to "The Company Names Tribunal" (also known as "the Adjudicator") which the UK Intellectual Property Office operates and administers. Further information is available at www.ipo.gov.uk

If there is a trade mark registration which is identical or similar to the company name you have chosen and you are in the same type of business you may face legal action for a trade mark infringement. For further advice, including how to search the trade marks register, contact the UK Intellectual Property Office on 08459 500 505 or visit their website at www.ipo.gov.uk

No. You cannot reserve a name. We cannot guarantee to process formation applications in strict order of the time or date of their receipt. Please note that in general, formation applications sent via software filing are processed more quickly than paper applications.

Form 10 and Form 12 are available free of charge from Companies House and you can download them from Companies House website at www.companieshouse.gov.uk. We cannot provide memorandum or articles of association but you can obtain specimens of these documents from legal stationers, accountants, solicitors or company formation agents who can also supply Forms 10 and 12. Names and addresses are available in business telephone directories. You can download Community Interest Company form CIC 36 from the Regulator of Community Interest Companies' website at www.cicregulator.gov.uk.

All company formation documents are subject to certain checks including those necessary to ensure prospective officers are not on the Disqualified Directors' Register maintained by Companies House

If the documents satisfy all the appropriate examination and name acceptance tests we will incorporate the company, issue a certificate of incorporation and the documents will appear on the public record for public inspection.

Companies House staff can provide you with guidance on company names and the forms required to form a company as well as advice on filing requirements. However, they cannot advise you about the content of your company'Fs memorandum and articles, or whether a company is the best vehicle for your business. If you are unsure about any aspect of forming a company, you should consider seeking professional advice from a solicitor, accountant or company formation agent.