1. Is there more than one type of company?
There are four main types of company formation:
- Private company limited by shares - members' liability is limited to the amount unpaid on shares they hold.
- Private company limited by guarantee - members' liability is limited to the amount they have agreed to contribute to the company's assets if it is wound up. This includes RTM (Right to Manage) companies and commonhold associations.
- Private unlimited company - there is no limit to the members' liability.
- Public limited company (PLC) - the company's shares may be offered for sale to the general public and members' liability is limited to the amount unpaid on shares held by them. More about PLCs can be found in chapter 2.
2. Who can form a company?
The Companies Act generally allows one or more persons to form a company for any lawful purpose by subscribing to its memorandum of as sociation. However, a public company or an unlimited company must have at least two subscribers. Information about companies formed by a single person can be found in chapter 3. (In law, 'person' includes individuals and companies.)
3. How do I form a company?
Ready-made companies are available from company formation agents whose names and addresses appear in the Yellow Pages. If you incorporate a company yourself, you will need to send the following documents, together with the registration fee (see question 13 below) to the Registrar of Companies:
- A memorandum of association
- Articles of association (except where Table A is adopted without modification - see question 5)
- Form 10
- Form 12
Each of these documents is explained below.
4. What is a memorandum of association?
This document sets out:
- the company's name,
- where the registered office of the company is situated (in England, Wales or Scotland); and
- what it will do (its objects). The object of a company may simply be to carry on business as a general commercial company.
Other clauses to be included in the memorandum depend on the type of company being incorporated. The form of memorandum for each type of company is set out in a set of tables called The Companies (Tables A to F) Regulations, 1985. (In this booklet Companies House have called them 'the Tables'.) These tables do not apply to RTM companies or commonhold associations. The memorandum and articles for these types of companies are set out in:
- For RTM companies: ‘The RTM Companies (Memorandum and Articles of Association (England) Regulations 2003’ or ‘The RTM Companies (Memorandum and Articles of Association (Wales) Regulations 2004’
- For commonhold associations: ‘The Commonhold Regulations 2004’. I n order for a commonhold to be registered at Companies House, its memorandum and articles of association must also be registered at the Land Registry.
The company's memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.
| Tables The Companies (Tables A to F) Regulations 1985, SI 1985/805, (ISBN 0110568052), and the Companies (Tables A to F) (Amendment) Regulations 1985, SI 1985/1052 (ISBN 0110570529) are available to buy from ‘The Stationery Office Limited’ at www.tso.co.uk/bookshop. Table A was further amended by the Companies Act 1985 (Electronic Communication) Order 2000, SI 2000/3373. This is available, free of charge, at www.legislation.hmso.gov.uk/si/si2000/20003373.html. Likewise, ‘The RTM Companies (Memorandum and Articles of Association (England) Regulations 2003’ SI 2003/2120, ‘The RTM Companies (Memorandum and Articles of Association (Wales) Regulations 2004’ and ‘The Commonhold Regulations 2004’, SI 2004/1829 are also available from www.hmso.gov.uk |
5. What are articles of association?
This document sets out the rules for the running of the company's internal affairs. Model articles are provided in the Tables mentioned above.
A company may adopt the whole of Table A as its articles or any part of it.
A company limited by shares which has adopted the whole of Table A without modification does not need to deliver a copy for registration. However, you must attach a letter to your application saying this.
| NOTE: If you adopt Table A without modification then you will need to appoint at least two directors. However, a private company can have just one director, if it's articles allow (see question 8). So if your company will have only one director, you need to adopt a modified version of Table A. |
If Table A is adopted with modifications, you must deliver the articles for registration.
All companies that are limited by guarantee or unlimited must register articles. These should be in accordance with, or as near to that form as circumstances permit, the following tables:
| Company limited by guarantee without share capital* |
Table C |
| Unlimited company with share capital |
Table E |
* Table C does not apply to RTM Companies or Commonhold Associations but articles for these companies are prescribed in the regulations mentioned at question 4.
The company's articles delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.
6. What is Form 10?
Form 10 gives details of the first director(s), secretary and the intended address of the registered office. As well as their names and addresses, the company's directors must give their date of birth, occupation and details of other directorships they have held within the last five years. Each officer appointed and each subscriber (or their agent) must sign and date the form.
Officers acting as both director and secretary
The same person can be both a director and company secretary, provided there is another director. A sole director cannot also be the company secretary. |
7. What is a registered office?
It is the address of a company to which Companies House letters and reminders will be sent. The registered office can be anywhere in England and Wales (or Scotland if your company is registered there). The registered office must always be an effective address for delivering documents to the company, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly. If a company changes its registered office address after incorporation, the new address must be notified to Companies House on Form 287.
Valid addresses
Companies House uses the Post Office address file to verify addresses; so, to avoid delays, please ensure that your proposed registered office address is recognised by the Post Office and always give the correct postcode on forms sent for registration. |
8. What is the minimum number of officers a company requires?
Every company must have formally appointed company officers at all times.
A private company must have at least:
- one director - but the company's articles of association may require more than one (See Question 5).
- one secretary - formal qualifications are not required. A company's sole director cannot also be the company secretary.
A public company must have at least:
- two directors;
- one secretary - formally qualified, see chapter 2.
All company officers have wide responsibilities in law, but the key requirements are contained in the booklet, 'Directors and Secretaries Guide'.
After incorporation, you must tell Companies House about:
- the appointment of a new officer - use Form 288a;
- an officer's resignation from the company - use Form 288b;
- changes in an officer's name or address or any of the other details originally registered on Form 10 - use Form 288c.
9. Can anyone be a company director?
In general terms, yes, but there are some rules. You can't be a company director if:
- you are an undischarged bankrupt or disqualified by a court from holding a directorship, unless given leave to act in respect of a particular company or companies;
- in the case of PLCs or their subsidiaries, you are over 70 years of age or reach 70 years of age while in office, unless you are appointed or re-appointed by resolution of the company in general meeting of which special notice has been given.
There is no minimum age limit in the Companies Act for a director to be appointed in England and Wales. However, he or she must be able to consent to their own appointment. You should seek legal advice if you intend to have a very young person as a director of your company.
In Scotland the Registrar will not register for any company the appointment of a director under the age of 16 years old. A child below that age does not have the legal capacity to accept a directorship - Age of Legal Capacity (Scotland) Act 1991. If you need more information, contact Companies House, Edinburgh.
Some people not of British nationality are restricted as to what work they may do 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)
10. What is a Form 12?
Form 12 is a statutory declaration of compliance with all the legal requirements relating to the incorporation of a company. It must be signed by a solicitor who is forming the company, or by one of the people named as a director or company secretary on Form 10. It must be signed in the presence of a commissioner for oaths, a notary public, a justice of the peace or a solicitor.
Signing the declaration on Form 12
- Form 12 must be signed and dated after all the other documents are signed and dated. This is because Form 12 confirms that all other registration requirements have been completed.
- The form must clearly show if a person has signed on behalf of a corporate director. If it appears that the person who signed is not a director, this will cause delay.
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11. What happens to the documents sent to the Registrar?
All company formation documents are subject to certain checks including checks of prospective officers against the Disqualified Directors' Register.
The Registrar then keeps the documents and makes them available for public inspection.
12. Can I choose any name I want for my company?
No. There are some restrictions on your choice of company name. the booklet, 'Company Names', explains how those restrictions may affect your choice of name.
Company name checks
It is important to check that the name you want is acceptable to Companies House before you complete the company formation documents.
Briefly, the restrictions are that:
- you cannot register the same name as another company;
- the use of certain words is restricted; and
- names likely to cause offence are not allowed.
It is also important to check whether your chosen name is similar to any other names already on the register. If your chosen name is too like another name, an objection could be made within the 12 months following the incorporation of your company and you could be directed by the Secretary of State to change the company's name. |
Names cannot be reserved and formation applications are not processed strictly in order of time or date of receipt. In the unlikely event that Companies House receive more than one application to register the same name, only one will be registered. The second will be refused because the name would then already be on the names index. There can be no guarantee which application will be processed first. In general, company incorporation applications delivered electronically are processed more quickly than other applications delivered on paper.
To be able to use the ‘Electronic Filing’ service for company incorporations you must have suitable software.
If you would like to know more about this service click here.
13. How much does Companies House charge to incorporate a company?
The standard registration fee is £20, but the premium service (cost: £50) provides incorporation on the same day as Companies House receive the formation documents, if they are hand delivered before 3pm. Posted applications cannot be given the same guarantee although, in most cases, Companies House will register the application on the same day of receipt.
For users of the Electronic Filing service, the standard fee is £15 and the premium same-day service is £30. To be able to incorporate electronically, you must either purchase suitable software or develop your own software. Visit the web site www.companieshouse.gov.uk for more information.
Same-day applications
Posted, couriered and other sealed same-day applications must be clearly marked on the envelope 'for the attention of New Companies Section' and 'Same-day Incorporation'. |
Cheques should be made payable to Companies House.
Please note : In order for a commonhold association to register its property as a 'freehold estate in commonhold land', its memorandum and articles of association must be registered at Land Registry .
| The fees will be changing from 1 February 2005. Click here for a full list of the new fees. |
14. Where can I obtain forms to incorporate a company?
Forms 10 and 12 are available free of charge from Companies House but Companies House cannot provide a memorandum or articles of association. Specimens of these documents can be obtained from legal stationers, accountants, solicitors or company formation agents who can also supply Forms 10 and 12. Names and addresses are available in business phone books.
15. Can I deal direct with Companies House to form my company?
Yes. However, while the staff will be happy to give you guidance on general matters (such as filling in forms or advice on company names), they cannot advise you about the content of the memorandum and articles, or if an incorporated company is the best vehicle for your business.
If you are unsure about any aspect of forming a company, please seek professional advice from your solicitor, accountant or company formation agent. your business. |
