So you’ve got your business idea, you’ve got your vision, what’s next? Get registered.
Here’s our guidance – it’s not absolutely everything in the known universe about registering a company. It’s the basics we think you should know to get the job done and done properly. The summary is at the top. The detail is below. Call us or message us if you need help. Let’s go.
Why register? If you don’t register, then it’s just “you” – all your contracts will be between you personally and the other party. All tax payable comes from your personal income. For some people (e.g. freelancers), then it’s fine not to register a company, but if you’re creating a ‘start-up’ with ambitions to grow it, then this is a minimum requirement.
Cost? £12 if you do it yourself online following this guide.
How? Complete the registration via this link: https://www.gov.uk/limited-company-formation/register-your-company. Refer to the No-Frills Guide section below if things come up that you’re unsure on.
Important: Keep hold of the registration details. Login details, registration numbers etc. Keep a note of them in your To-do List.
How long should it take? 5-10 minutes reading this guide. 20-25 minutes completing the registration.
Impact? Once registered, your company is registered with the UK companies registry, known as Companies House. Search for your company name here to see the details: https://beta.companieshouse.gov.uk/
This is guidance for people setting up limited companies, which are suitable for private, for-profit ventures.
STEP 1 – CHOOSE REGISTERED NAME
This is your ‘limited’ company name. It can be different to your trading name (i.e. your brand). All being well, it’s available and you can go with the name you want.
If someone else already has it, then too bad, you need to choose a different one. You can check name availability here: https://beta.companieshouse.gov.uk/company-name-availability
If someone has the registered name you want, then you can register with a different name, and still use the brand name you want provided that someone else hasn’t already claimed the trademark for that name in the “category” you want it for.
Search here for our guide on trademarks and trademark categories.
Click here for guidance on if your name contains a potentially sensitive word. You should avoid politically slanted or offensive words in your company name to avoid it being rejected by Companies House.
STEP 2 – CHOOSE ADDRESS
Choose one where you want to receive mail from Companies House. This can be a home address – but just remember it will appear on the public register and all your contracts – so if you can, you might prefer an office address. It’s entirely up to you.
STEP 3 – STANDARD INDUSTRIAL CODE (SIC)
You’ll be asked to select one or more of these. Just go with whatever you think fits best. It won’t impact your business in future. Enough said!
STEP 4 – CHOOSE DIRECTORS
Sole founder? Then this is you.
Co-founders? Then this is both or all of you.
Your situation is more complicated than that? Here are some key points:
- Being a shareholder and a director is not the same thing. You can be a shareholder and not a director, and you can be a director and not a shareholder.
- You can have ‘executive directors’ (e.g. the CEO) and you can have ‘non-executive directors’ (e.g. your board advisor who visits 5 times a year). When you register though, there is no distinction – you’re either a director or you’re not.
- You need at least one and they must be over 16.
Which addresses? Choose wherever you want their Companies House mail to be sent to.
Do I need a company secretary for my startup? No.
Search for ‘Director’ on the Encyclawpedia for more on what it means to be a director and relevant responsibilities.
STEP 5 – ALLOCATE SHARES
If it’s just you then this part is easy.
If there is more than one of you and you don’t yet know how the shares will be allocated then STOP NOW.
Go and decide how to allocate shares between you – then do the registration. Then enter into a co-founder agreement between you agreeing on the shareholdings and all the questions like ‘what if someone leaves?’ and ‘who is going to do what?’.
Input the relevant personal details here. You can update them later if you need to (e.g. if someone moves house).
STEP 6 – CHOOSE SHARE CAPITAL AND NUMBER OF SHARES
How many shares do I put here?
There is no golden rule on how many shares you choose or the value you choose but if you want to transfer shares freely in future, then going for a share capital of £100, split into 10,000 shares of £0.01 each is a sensible option.
However, it’s open, and you can choose however many you want, but try and follow this section to make sure you’re making the right choice for you.
Step 1 is to choose the total share capital – i.e. the amount you will initially pay to your company to buy the shares from it. Typically, you’ll choose £10 or £100 – either is fine. In this case, I’ll choose £100.
Step 2 is to choose the number of shares that my £100 share capital is split into.
e.g. 1 – I choose to issue 100 shares. Therefore, each one will have a value of £1 – £100 divided by 100 shares gets you a share value of £1. I’ll get 50 and my co-founder will get 50.
e.g. 2 – I choose to issue 10,000 shares. Therefore, each will have a value of £0.01 (i.e. 1p) – £100 divided by 10,000 shares gets you a share value of £0.01. I’ll get 5000 and my co-founder will get 5000.
In both examples, the company share capital is still £100.
The difference between e.g.1 and e.g.2 is that in e.g.2, your shares can be transferred in smaller increments, which can make life easier if you’re looking to give away small percentages in your company. In e.g.1, you can transfer whole percentages – 1% (1 share), 2% (2 shares), etc. In e.g. 2, you can transfer 0.2% (20 shares out of 10,000), or 0.01% (1 share out of 10,000). Having more shares, means it is also easier to issue new ones to investors with desired percentages.
STEP 7 – PERSONS OF SIGNIFICANT CONTROL (PSC) REGISTER
f anyone owns 25% or more then you should put their details in when asked if you have any ‘persons of significant control’.
The government introduced this to prevent fraud and money-laundering.
STEP 8 – ARTICLES OF ASSOCIATION
Articles of Association – a.k.a. – your company constitution, and your company rule book, covering things like share transfers and issuances and decision making processes of directors. [Note: Legal Sidekick covers many of these points in our co-founder and shareholder agreements]
When registering, you get asked if you want the ‘model articles’ or to adopt your own. We recommend you take the model articles at this stage, and you can register your own ‘bespoke’ articles of association later.
STEP 9 – PAY AND FINALISE
Pay your £12, click submit and wait for the email confirmations with your registration certificate.
STEP 10 – RECORD THE DETAILS
Record the registration details and references somewhere safe – e.g. on your To-do List.
Anything else? That’s pretty much it! You can create formal share certificates too if you like – download your share certificate template on the Encyclawpedia.
Keep track of your progress in your Master Plan.
Any questions? Let us know.
A downloadable version of this guide is available below.
This Step by Step Guide was written by Legal Sidekick. Legal Sidekick is the legal platform for startups. We offer automated contracts and loads of startup legal resources and guides. For ‘how to register a company UK’ queries, contact us if you need help.