If you’re thinking about starting a company in the UK, then it’s a good idea to get yourself familiar with Companies House and their registration process.
Between March 2019 and 2020, the total register size of Companies House had increased by 3.5%, taking it to 4,350,913 companies in total. Because so many companies are registering, the process should be as straightforward as possible, but it’s easy to get bogged down by the requirements and lose yourself in the process.
Luckily, here at Mint Formations, we’re experts in registering businesses through Companies House and guiding companies through the processes needed to get their companies registered. So we’ve put together this guide so that you can find out exactly what you need to know to get yours up and running.
What Is Companies House?
Companies House is part of HM Revenues and Customs; it’s a publicly owned, Government authority that the Department of Business, Energy and Industrial Strategy manages.
Its primary purpose is to regulate and incorporate limited companies and limited liability partnerships (LLPs) in the UK. It’s also responsible for inspecting and maintaining information about these businesses.
Companies House focuses on the incorporation and dissolution of UK companies, but it is also responsible for storing accurate information on limited companies in the UK. These records include business information such as directors names, addresses and shareholders. All of the data registered with Companies House is publicly displayed and available to the general public.
Who Needs to Register with Companies House?
Companies House is responsible for the approval of the incorporation of limited companies. Businesses can register online, by post or through a company formations agency.
Not all businesses need to register as Companies House only deals with limited companies. So if you are a self-employed sole trader, you won’t need to register.
The types of businesses that do need to register include:
- Private limited companies
- Private unlimited companies
- Public limited companies
- Limited liability partnerships
- Limited partnerships
- International companies.
How to Register with Companies House in 7 Steps
Registering with Companies House is a relatively simple process in theory, but we’ve split it up into seven steps to make it even easier.
Step 1 — Is a Limited Company Right for You?
It’s worth checking to make sure that setting up a limited company is the right choice for your business, as the way you set up your company will affect how you pay tax and the funding available to you. If you’re not sure that a limited company is right for you, you can consider becoming:
- A sole trader
- A business partnership
- A social enterprise
- An unincorporated association.
Step 2 — Choose or Check Your Business Name
Once you’d decided the structure of your business, you’ll need to choose a name. If you’ve already got a business name, you’ll have to check that it doesn’t break any of the following rules:
- Your name can’t be the same as an already registered business.
- Your name cannot be marginally different to an existing business name
- It cannot be offensive or inappropriate.
If you don’t check that your business name follows these rules and go ahead with the name, you may breach a trademark and be required to change your business name and even pay damages.
One of the easiest ways to check if your potential business name is already in use is to use our advanced name searcher, which scours through records to ensure that your business name is good to go.
Step 3 — Pick Your Company Directors and Secretary
To register your company, you’ll need to appoint a director and, although not required for registration, it’s a good idea to appoint a company secretary as well.
Directors of limited companies are responsible for:
- Keeping company records and reporting changes
- Filing tax returns and accounts
- Paying Corporation Tax
- Following your company’s rules as set out in the articles of association.
If you choose to be your company director, don’t panic if accounting isn’t your strongest skill as you can hire other people to manage your accounts. But you’ll still be legally responsible for all company records and accounts. It’s good to bear in mind that if a director does not meet their responsibilities, they can be fined, disqualified and potentially prosecuted.
Once you’ve decided on your director(s), then it’s wise to appoint a company secretary as well. A company secretary is responsible for ensuring that the business is compliant with the Companies Act, 2006. Their responsibilities include:
- Making sure the company’s register and records are up to date
- Establishing the business’s registered office
- Arranging board meeting and taking minutes
- Informing HMRC and Companies House of any relevant changes
You’re not required to have a company secretary, but it’s definitely advantageous.
Step 4 — Choose Your Shareholders or Guarantors
To register your business with Companies House, you’ll need to choose at least one shareholder or guarantor. A shareholder is the owner of a company limited by its shares, whereas a guarantor is the owner of a company limited by guarantee.
Shareholders and guarantors are responsible for contributing to any business debts, but there’s a significant difference between the two. Shareholders are only liable for debts up to the value of their unpaid shares, whereas guarantors will pay a fixed sum towards debts.
Another difference is that shareholders will usually take a percentage of the profit calculated by the value of their shares. In contrast, most guarantors won’t take profit for themselves as they are typically associated with non-profit organisations.
Step 5 — Document How You Will Run Your Company
To get your business registered, you’re going to need to produce both a memorandum and articles of association. These instantly sound a bit intimidating, but they’re essentially documents that state how you plan to run your business and who will be involved.
The memorandum contains all of the names of subscribers (the founders of the business and shareholders). Memorandums follow a government-supplied template and must include:
- Company name
- Incorporation Date
- Type of company
- Act under which the company is registered
- Subscribers names and signatures
- Shareholders and guarantors limited liability.
The articles of association set out the rules that will decide how you will manage the company. Usually, this will include:
- Share and the distribution of shares and dividends
- Capitalisation of profits
- Voting rights
- Shareholders
- Directors’ responsibility, power, indemnity and insurance.
The articles of association aren’t permanent and can be changed, but you will need to notify Companies House of any changes.
Step 6 – Find Out What Records You Need to Keep
Limited companies are required to keep certain records by law. There are two categories of documents you’ll need to keep: company records and financial records.
Your company records must include:
- Details of directors, shareholders and secretaries
- Shareholder vote results and resolutions
- Loan repayment promises and their recipients
- Promises of payments if something goes wrong and the company is at fault.
- Transaction history of shares
- Any loan and mortgage that is secured against company assets
Your financial and accounting records must include:
- All money spent and received includes grants.
- Asset details
- All debts that the company owes
- Any stock the company owns at the end of the financial year
- Stocktakings
- Bought and sold goods and who they were sold to (except retail)
You must keep your records diligently, as a failure to do so can result in a fine of £3000 from HMRC and even disqualification as a company director.
All records need to be kept for a minimum of six years (some need to be kept longer). If any of your records are destroyed, lost or stolen, then you must inform HMRC immediately, include the information in your tax return and do your best to recreate the documents.
Step 7 — Register with Companies House
The final step in the process is to file your registration with Companies House. To do this, you’ll need to register an official address and choose a SIC code. Your SIC code identifies what your business does.
Once you have registered your business address with a SIC code, you’ll need to provide three pieces of information about yourself and any shareholders or guarantors. This information can be:
- Town of birth
- Mother’s maiden name
- Telephone number
- Passport number
- National Insurance number.
Once you have supplied this information, the registration will be a step-by-step process that is easy to follow. Providing you have completed the form correctly, your business should appear on the register in about 24 hours.
How Much Does Companies House Registration Cost?
The cost of registering your business with Companies House varies depending on the way you submit your application. It also changes depending on whether you complete the application yourself or use a company formations agent.
If you complete the registration process yourself, it costs £12 online and can be paid by debit or credit card and usually takes 24 hours. The fee increases to £40 if you decided to apply by post, but it can take up to 10 days to process. If you’re desperate to get your application registered on the same day, you’ll need to pay £100 and complete your application by 3 pm.
How Difficult Is Registering with Companies House?
In theory, registering with Companies House is a straightforward process. But in reality, registrations are often rejected or delayed for minor oversights or errors in the application.
Rejected registrations are not uncommon, and reasons for rejection can include:
- Your company name is already taken or too similar to an existing business name.
- The company name is considered inappropriate or offensive
- You’ve missed some vital information
- Incorrect article of association or memorandum
- Incorrect share structure
Often registrations can be rejected for a simple mistake like an incorrect date of birth or address, which means you will fail the anti-money laundering checks and need to go through the whole process again.
Do I Have to Register with Companies House Myself?
If you’re feeling a bit overwhelmed by everything you need to do to get your company registered, you’re not alone. The process of registering your business is theoretically straightforward, but it can quickly become very complicated. But you don’t have to do it all yourself.
One of the best ways to ensure that your registration goes off without a hitch is to use a company formation agency authorised by Companies House, like Mint Formations. Agencies like ours will make sure that you avoid disappointment and ensure a successful company registration.
Need some help getting your business registered with Companies House? Get in touch with Mint Formations today, and we can make sure your application is successful. Our company formation packages start from as little as £12.99.
