5 things you need to form a limited company


The UK has worked hard to make starting your own company easy, and this includes incorporating your business as a limited company. We’ve provided a list of 5 items you’ll need to bring to the party before you begin the company formation process. There are other things you will need, but don’t worry, you will pick these up along the way, as part of the online company registration process.

What you need to form a limited company

1. A company name

One of the most exciting aspects of company formation is choosing a company name. There are some rules that Companies House impose regarding what you choose to name your company:

  • First, your company name needs to be unique. It can’t be in use by any other registered company, and it can’t be deemed too similar to an existing company name, either. To see if the name you’d like to use is already taken, use our company name search tool.
  • You aren’t allowed to use offensive words, and you need to be wary of using sensitive words. You’re not allowed to suggest any connection to the government or public authority, or any word otherwise protected. Companies House provide a list of all such words, together with the requirements for their usage, which can be found here.
  • Finally, your company name will be limited to 60 characters, and needs to end either with the word “limited” or its abbreviation “LTD” (although some exemptions do exist).
2. Registered office address

Your company’s registered office address is its legal headquarters – its ‘home’ in the eyes of the law, and every registered company in the UK must have one. This is the address that will be used for all the government’s official correspondence with your company, as well as for storing your company registers ready for inspections (unless an alternative address is provided). There are several rules surrounding the type of address you can use, including:

  • It must be in the jurisdiction (England and Wales, Scotland or Northern Ireland) in which you’re incorporating your company. Whilst you are free to change your registered office at any point after incorporation, you cannot change the jurisdiction your company has been registered in
  • It must be a physical address
  • You cannot use a PO Box number or DX number

It’s important to note that your company’s registered office address will be made publicly available on the register of companies.

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3. A service address

All company directors, secretaries, PSC and LLP members need to provide a service address when incorporating a company. Like the Registered Office, the service address is the official contact address when HMRC or Companies House need to contact you.

The following rules apply to a service address:

  • It can be anywhere in the UK or overseas
  • It must be a physical address
  • You cannot use a PO Box number or DX number
  • Your service address can be the same as your registered office address
  • You are only allowed to use one service address at a time, but you can change your service address at any time

Just like your registered office address, the service address of members will be displayed on the public register.

4. A director

To form a limited company, you will need to appoint at least one natural (human) company director. It is his/her responsibility to make decisions on behalf of the company and oversee day-to-day operations. Almost anyone is allowed to be a company director, the only restrictions being:

  • You cannot be under the age of 16
  • You cannot be an undischarged bankrupt
  • You cannot be a disqualified director whose term of disqualification isn’t yet expired
  • You cannot be the auditor of the company

Directors aren’t fixed – new ones can be appointed and old ones can be removed as necessary following incorporation, in accordance with the company’s articles

5. A shareholder

You’ll also need at least one shareholder (or member)  – someone who will own the company. The vast majority of companies are private companies limited by shares, whose purpose is to make a profit and distribute it to the owners or shareholders.

The director and shareholder can be the same person, so if you are forming a company on your own, you can use your name for both positions.

Where the company is to be limited by guarantee, the members (also known as guarantors) agree to ‘guarantee’ a certain amount of money to pay into the company, should it ever experience financial difficulty.

Understanding limited company shares


Other Considerations

The five items mentioned above are the things you need to get the company formation process started. There are of course other matters to consider when incorporating a company, but these are supplied for you by your company formation agent, as part of their online registration service – so you don’t need to worry about sourcing them yourself:

Standard Industrial Classification (SIC) code – A SIC code identifies the sort of business your company will undertake and is used for information purposes by a number of third parties including government agencies. Your company needs to submit at least one of these codes on incorporation. Quality Company Formations (and other formation agents) supply a SIC code finder, making it easy for you to choose the required SIC code or codes.

Memorandum and articles of association this combined document makes up the foundation of your company’s constitution, and is required on incorporation.

The Memorandum is a declaration by the company’s first shareholder or shareholders agreeing to form a company.

The Articles outline the basic rules and governance of the company (such as how decisions are to be made or what powers are granted to the directors). Under the Companies Act 2006, companies can use the ‘Model Articles’ which are a basic set of Articles you can use if you do not have your own. After incorporation, the Memorandum becomes a historical document and can never be changed, but your Articles can be amended with the appropriate shareholder’s agreement.

Memorandum and Articles of Association for UK limited companies


Company type A company limited by shares is the most frequently used company type in the UK and the go-to choice for most businesses; however, when you reach the incorporation stage, you may find it appropriate to form a different company type. Examples of other company types include limited by guarantee (often used by non-profit organisations), limited liability partnership, and public limited company. You cannot change a company type following incorporation.

Persons of Significant Control (PSC) Register – Almost all companies registered in the UK are required to report their PSC register on incorporation, and any changes that occur thereafter. The PSC register documents the individuals and relevant corporate entities who have control over a company.

Why choose company formation?

Company formation is the process of registering a business as a limited company through Companies House. Companies House is the official registrar of companies for the UK.

By forming (or ‘incorporating’) a limited company, you will be turning your new business into an independent entity in the eyes of the law. This means your company officially transforms into its own legal entity, which is crucial to your own personal financial wellbeing,

if your company turns out to be in anyway unsuccessful. It creates a crucial separation between your finances, assets, contracts and the finances, assets and contracts owned by your company. As the owner of your new limited company, you can only be held liable, in almost every circumstance, for the amount up to the nominal value of the shares you have in that company.

This is called ‘limited liability.’

Contacting HMRC when you set up a new limited company


It’s also worth pointing out there are several different types of limited companies in the UK – although most private limited companies are limited by shares. This means that ownership of the company is divided between a predefined number of shares, although more shares can be added or indeed taken away at a later point (provided the appropriate authorities are in place).

Just to be clear: it is not a legal requirement to form a limited company in the UK. You are free to do business as a sole trader. But if you choose this route, any finances or assets you own will be considered fair game in the eyes of the law, if your business goes under. That’s why so many business owners choose to play it safe by forming a limited company – and because the process of forming a company is so fast and affordable, it’s an easy decision for most individuals to make.

Quality Company Formations provides a range of company formation packages, including several different types of company structure, to suit most requirements. Check out our packages page for options and prices.

About the author

James Howell

James Howell, Financial Controller and Senior Manager at Quality Company Formations, is the driving force behind the company’s financial department and is focussed on the success of the business. Throughout the growth of the business and harking back to his many years of experience in accountancy practice, dealing with all types of SMEs, he has developed a keen interest in company formation and company secretarial work. In his spare time, James is a father to 2 young children but keeps up strong interests in both music and sport.

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