Company registration is the process of incorporating a new or existing business as a limited company . When this happens, the business becomes a distinct legal entity, an individual ‘person’ in the eyes of the law. Essentially, this means that the company is entirely separate from its owners regarding finances, liabilities, contractual agreements, and ownership of property and assets.
The law does not view unincorporated businesses like sole traders as distinct legal entities. When you operate as a sole trader, there is no separation between the business and the owner in terms of finances, assets, and liability.
Generally, the main reason to register a limited company is to limit the financial responsibility of the people who own the business. This protection is known as ‘limited liability’. Private companies can be either limited by shares or limited by guarantee.
The owners of a company limited by shares are only liable for the value of their shares. The owners of a company limited by guarantee are liable only for the value of their guarantees. Their personal finances and assets are protected beyond the limit of their liabilities.
This is not the case for unincorporated business structures. Sole traders, for example, have unlimited liability. They are wholly liable for all business debts and claims because there is no legal or financial distinction between the individual person and their business.
Aside from the obvious benefit of protecting your personal assets, limited company registration creates a professional, corporate image and allows business owners to pay themselves in a more tax-efficient manner.
Furthermore, limited status gives the impression of an established and trustworthy business. As a result, dealing with limited companies is a more attractive prospect to clients, investors, lenders, and suppliers.
Registering as a limited company is an effective and affordable way to further the potential of a fledgling or existing business, attract more favourable tax rates, and appeal to a wider audience.
Companies House is the Registrar of Companies in the UK. All UK limited companies and limited liability partnerships (LLPs) and overseas companies with a place of business in the UK are legally required to register with this government agency.
However, you don’t have to set up your company using Companies House incorporation services. You can register through a company formation agent instead, who will then send your application to the registrar for approval. This is the most popular option because it’s simpler, and you will have access to help and support.
The primary role and activities of Companies House are:
The Companies Act 2006 governs all UK companies under a single law regime, but Companies House operates in three separate jurisdictions, each of which is served by a different registrar:
A company can only be registered in one of these countries, but it can be based and operate in all parts of the UK and overseas. The country of registration dictates the company’s legal jurisdiction and the location of its registered office (official address). For example, if you incorporate a company in England & Wales, your registered office must be in England or Wales.
If you register through an agent like Rapid Formations, company registration is straightforward because the whole process is carried out online. Applications are completed and delivered electronically to Companies House, and approval is normally granted within 3 hours.
Furthermore, you only need one person to register and run a company. This is because the same person can be the sole director, shareholder, or guarantor.
To register a private company limited by shares or guarantee, you will require:
Rapid Formations offers various online company registration packages for registering a limited company or LLP in England and Wales, Scotland or Northern Ireland.
We also provide several professional company address services in London, including a Registered Office Service, a Service Address, and a Business Address.
You will authorise submitting your online application to Companies House by creating a unique digital signature. When the registrar approves your company registration (usually within 24 hours), you will receive digital copies of your incorporation documents by email.
Whether you register through a company formation agent or at Companies House depends.
If you register a company online through an approved agency like Rapid Formations, you won’t have to submit any paperwork or deal with any physical documentation. Our incorporation service is electronic and carried out entirely online.
However, if you decide to use the registration services provided by Companies House, you will have to complete form IN01, which is extensive, and deliver it online or by post. You may also have to submit certain documents, depending on whether you use the online or postal service.
By choosing to set up a company through an agent like Rapid Formations, all you need to do is complete a simple online application form. The following electronic documents must be completed (we’ll help you with these) and submitted to Companies House:
This is the company’s governing document. The articles of association set out the rules about how the company should be run, the members’ and directors’ rights and responsibilities, how and when shares can be issued or transferred, and how decisions should be made. We provide standard Model articles with all of our company registration packages. This version is suitable for most new and small companies.
Supporting documentation will only be required if your company name contains ‘sensitive’ words or expressions that need to be approved by Companies House or another authorising body.
This additional documentation may be attached to your online application as an email, a digital file, or a scanned paper document. There is no need to send anything by post.
The memorandum is a declaration of the company’s founding members (i.e. the shareholders or guarantors), which states:
You do not have to complete this form manually, but you must provide certain information during the registration process, which Companies House will enter on the memorandum. A copy will be provided to you after incorporation. The memorandum will also be displayed on the public register of companies.
Companies House provides online and postal incorporation services that can take up to 10 days to process. You don’t need to post any physical paperwork if you use the online service unless you are resubmitting an rejected application or are asked to send additional documentation.
To register a company by post, you will need to submit the following documents:
The postal application register can register a company limited by shares or guarantee with model or altered articles. However, the online incorporation service from Companies House can only be used to set up a limited by shares company with Model articles and no ‘sensitive’ words in its name.
Our streamlined application process provides online company registration in 24 working hours (subject to Companies House workload). Our 4 Steps to Company Registration guide outlines this simple online procedure.
Rapid Formations offers a range of online company registration packages for private limited companies, with prices starting at just £2.99 (excluding the £100 Companies House fee). Our Basic Package is ideal for setting up a dormant company or reserving a company name for later use. One of our comprehensive packages may be more suitable if you want to begin trading immediately.
If Companies House rejects your company application, it will probably be down to a small error or oversight, which you can rectify quickly and easily.
When you submit an online application through a company formation agent, you will immediately be notified of any mistakes or missing information. You can then address the error and resubmit your application online on the same day for no extra charge. This is one of the many benefits of registering through a company formation agent.
However, if you use the incorporation services provided by Companies House, it can take significantly longer to be notified of a rejected application and then rectify the problem.
The most common reasons for company formation applications to be rejected are:
These errors can be easily avoided, so taking your time during the application process is worth it. It’s also important to check the availability of your company name before submitting your application.
If you choose to register your company through Rapid Formations, your application will be reviewed by a specialist agent before it is delivered to Companies House. This significantly reduces the risk of rejection.
We will notify you immediately if your registration is not accepted. You can also follow the progress of your application on our Online Admin Portal .
In most cases, errors can be fixed in minutes. If any additional documents are required, they can be sent electronically to Companies House for no extra charge. All being well the second time around, your new limited company should be approved and ready to trade within 24 hours.
You can start trading through your limited company once your company formation application has been approved. Alternatively, you can make your company dormant if you don’t plan to start trading straight away.
A UK limited company is considered to be actively trading when:
Companies House will inform HMRC that your new company has been incorporated. You will then receive a letter from HMRC at your registered office. This will contain your company’s Unique Taxpayer Reference and information on your tax-related obligation.
When you start trading through your company, it is ‘active’ for Corporation Tax . You must tell HMRC that it is active within 3 months of carrying out any business activity. HMRC will update their records with the information you provide. They will tell you when to pay Corporation Tax and file a Company Tax Return .
If your company is going to be dormant (i.e. not trading), you must tell HMRC your company is dormant for Corporation Tax . You can do this online, by post, or over the phone.
If you have employees, you must register the company as an employer and set up Pay As You Earn (PAYE). You will also need to register for VAT if your annual turnover is likely to exceed £90,000 (2024/25 VAT registration threshold).
The limited company structure allows you to bring in one or more business partners at any time. A business partner could be a valuable addition to your company, particularly if you are running the business single-handedly.
However, before you agree to appoint a new director or bring in additional shareholders, you must be certain that they have the necessary skills and knowledge to successfully manage all aspects of the business.
The introduction of a business partner can provide many benefits, such as:
We strongly recommend seeking expert legal advice before making a decision because it can be difficult to get rid of someone once they have a financial stake in a business. The right partner could be the making of your company, but the wrong one could prompt its swift demise.
If you wish to attract an equity partner (i.e. another shareholder), you will need to sell some of your company shares or issue new shares in exchange for capital investment. Ideally, this should be considered during the company formation process because your long-term plans will affect the number of shares you decide to issue.
If you are likely to bring in a business partner at some point after company registration, you should issue more than one share when you set up your company. This will enable you to transfer (sell) some of your existing shares at a later date.
Conversely, if you issue only one share to yourself, you won’t have any available shares to sell. Instead, you must increase your company’s issued capital by allotting (issuing) new shares. While not a huge issue, issuing new shares is more time-consuming and costly than transferring existing shares.
We hope you’ve found this post useful. Please comment below if you have any questions, or get in touch with our company registration team if you need help or advice on setting up a company.
If you would like to register a company , visit Rapid Formations’ homepage to get started with our simple 4 step process.