10 Things You Should Know about Setting up a Limited Company

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10 Things You Should Know about Setting up a Limited Company

Once you’ve learned how to set up a business and you’ve made the decision to register your start-up as a limited company, there are 10 important things to take into account. We outline what they are.

To set up your business as a limited company, you first have to submit an application to Companies House. This can be done directly via an electronic application form, or you can use the services of an established third party to register your company.
Whichever method you choose to incorporate your business, you need the same information and documents to complete the process. Find out the 10 things you should know about setting up a limited company and you’ll be ready to go in no time!

1. Choose Your Company Name

Your company name must be unique. It’s also advised not to pick a name too similar to a brand that already exists, as you may have to change it if a complaint is made.  Do your research and, ideally, settle on a name that accurately reflects your company’s values, mission and service. 

2. Have a Company Registered Address

You need to have an official address for your company. While a lot of new business owners use their personal residential address for registration, it’s recommended to have a separate business address. For this, you can use a third-party service, such as an established formations service, or your accountant’s company address. 

3. Appoint a Director

To form a limited company, you need to have at least one company director. However, it’s no longer mandatory to have a company secretary. When appointing directors, whether it’s just yourself or you and multiple partners, make sure you have all the details of these individuals to hand, including names, addresses, nationalities and dates of birth. 

4. Have Shareholders’ Details to Hand

Equally important as having your directors’ details to hand is noting the information of your company’s shareholders, including their name, full address, class of share and the number of shares they will own. You also need to provide three pieces of personal information, such as their town of birth, the last three digits of telephone number, their National Insurance or passport number, their mother’s maiden name, their eye colour or their father’s first name! 

5. Decide on Your Share Structure

When setting up a limited business, you’ll need to make a decision on how your company’s shareholdings are attributed, such as whether you’re going to solely own your shares or split them with others. It’s important to note that the dividends you declare need to be distributed in the same proportion as the shareholdings. It’s advisable to discuss the most suitable way to set up your share capital with a qualified financial advisor. 

6. Keep a Record of People of Significant Control

All companies have to keep a record of all “People of Significant Control” (PSC) — these are individuals who own 25% or more of the shares in a limited company or have voting rights above 25%. In order to keep the registrar up to date, all companies must submit an updated Confirmation Statement to Companies House on a yearly basis.

7. Gather Articles of Association

All companies are required to have a set of Articles, which govern all aspects of running a business, including the directors’ powers, shareholders’ decision-making processes and entitlements, voting rights, and how dividends are shared. You can use a “generic document” for these Articles from GOV.UK. 
However, if you decide to use your own amended Articles, you won’t be permitted to incorporate your company online — instead, you must file via post (Form IN01).

8. You Need a Memorandum of Association

The Memorandum of Association is an agreement confirming the intentions of the initial subscribers to form a limited company.  It includes the following wording: 
“Each subscriber to this memorandum of association wishes to form a company under the Companies Act 2006 and agrees to become a member of the company and to take at least one share.” 
When you register the details of your shareholders online, simply ticking a checkbox confirms that the registered/listed shareholder has authenticated the prescribed memorandum of association. No physical document needs to be submitted. 

9. Take Note of Your SIC Code

The SIC (Standard Industry Classification) code is used to identify the trade or industry of a company. Examples include SIC code “62012”, which is for “business and domestic software development”, and code “62020”, which identifies “IT consultancy activities”. While only a single code is required, you’re allowed to add up to four SIC codes to describe your company. 

10. Don’t Forget about Tax

Once you’ve set up your business as a limited company, you must register for corporation tax within three months of carrying out any form of business. You must also register with HMRC as an employer, as even if you’re the only person working in your business, you will effectively be a paid employee of your own business. 
Use the above 10 points as a checklist when you register your company. If you’re feeling overwhelmed or confused, don’t forget that there’s support out there, from the assistance of an accountant to organise your financial documents and processes to the help of a formations company that can take a lot of the initial stress off your plate so that you can focus your entrepreneurial mind on your products and strategy.

To find out how to set up your business and to get help registering your limited company today, contact Mint Formations.

Want to register your UK limited company today?


Raj co-founded Mint Formations with business partner Andy Tree in 2017. Mint formations is established to nurture small UK businesses and enable exciting new opportunities for quick growth. As a successful entrepreneur, Raj knows how to start and run a business. He currently resides as a board member of seven successful companies across the world. He is best known for founding Integra Global Solutions, specialists in robotics, automation, and business process optimisation.