Registering a company is relatively simple, although it’s not something any of us should attempt on a whim, or without some level of expert guidance. Those early days are some of the most pivotal, and they alone set the scene for your business’s entrance.
From managing expectations with your shareholders to understanding what structure works best for your business, everything falls under the ‘jurisdiction’ of corporate law. For that reason alone, now is the perfect time to make contact with corporate solicitors. More than anyone else, they have the knowledge you need to make a strong start when registering a new company.
1. Choosing Your Structure
Whether you want to operate as a sole trader, in partnership, or establish a limited liability company that represents its own legal entity – distinct from its shareholders – what you choose will have significant ramifications for you, the tax you pay, and whether or not your personal assets are ‘on the line’ should the business run into trouble.
Each structure poses its own advantages and disadvantages, but, with the right guidance from your solicitor, it’s usually clear which one is the best choice for your business.
2. Choosing a Name
This one is, of course, fundamental. You’ll want to choose a unique name for your business to be registered under. It may be obvious to you, or you may find inspiration a little elusive, but it’s not a step you can skip.
3. Selecting a Registered Office, Company Directors and Shareholders
You cannot set up a limited company without providing an official address – known as a registered office. It doesn’t have to be the same location from which your business operates, but it does have to be real – and will be displayed on the Public Registrar.
Similarly, the names of any company directors or shareholders/members will be listed in the Public Registrar.
4. Allocating Shares
At least one share needs to be allocated to each named shareholder, but you can issue any number of shares. For public companies, share capital must be no lower than £50,000 – but there is no lower limit for private companies.
You may think you have a good idea of how the business will be run, but now is the time to formalise all those details within the business’s articles of association and memorandum. This will lay out vital details, like shareholder’s rights. Any errors now could snowball into devastating blunders for the business down the line, so don’t underestimate the importance of formalising things as soon as possible.
Even if you have a pre-existing relationship with your shareholders – maybe they’re family or close friends, or people you’ve worked with successfully in the past – you can’t afford to ‘make do’ with an informal approach to running the business.
6. Keep Your Records
When starting a business, you can expect to see an onslaught of paperwork and, without the right approach, it can easily start to feel like a dog-eared mountain is miscellaneous forms and records. Now is the time, however, to find out which records need to be kept, or you may find yourself scrambling to get up to date with yourself further down the line. This is another aspect your solicitor can help with.
7. Submit Your Application
When registering a company, all business applications need to be submitted to Companies House. These days, this can all be done online – and much faster, too, with applications processed in a matter of hours rather than days.