Company Formation 

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Companies House is responsible for company formation and registration in Great Britain. It also has a key role in providing information about British companies.
A new company must:
•    Provide details of its constitution in the form of a Memorandum and Articles of Association.
•    Provide details of its directors, company secretary and members.
•    Have a registered office.

These documents are often prepared by private sector formation agents but there is no requirement in law to use an agent.  A new company comes into existence when the Registrar of Companies issues a certificate of incorporation.  A standard incorporation costs £20.00. A same-day company incorporation service is also available for an additional fee.
 
The following guidance is provided to help you understand how to register a company and the legal requirements that you must adhere to.
New Company Formation
Q.  Is there more than one type of company?
A.  There are four main types of company:
 
  • Private company limited by shares - members' liability is limited to the amount unpaid on shares they hold. This includes those community interest companies (CICs) which are private companies limited by shares.

  • 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 all RTM (Right to Manage) companies, common hold associations and those community interest companies which are companies limited by guarantee.
 
  • Private unlimited company - there is no limit to the members' liability.
 
  • Public limited company formation (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. This also includes community interest public limited companies (that is, CICs which are PLCs).

Q.  Who can form a company?
A.  The Companies Act generally allows one or more persons to form a company for any lawful purpose by subscribing to its memorandum of association. However, a public company or an unlimited company formation must have at least two subscribers.

Q.  How do I form a company?
A.  Ready-made companies are available from company formation agents such as The Retail Doctor. If you incorporate a company yourself, you will need to send the following documents, together with the registration fee to the Registrar of Companies:
 
•    A memorandum of association
•    Articles of association
•    Form 10
•    Form 12
Each of these documents is explained below.

Q.  What about community interest companies (CICs)?
A.   When forming a CIC the following documents are required in addition to those listed above:
•    A community interest statement
•    An excluded company declaration
•    These documents must be in a form approved by the CIC’s Regulator.

Q.  What is a Memorandum of Association?
A.  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. 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’. The company's memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.

Q.  What are Articles of Association?
A.  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 formation 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. CICs cannot take advantage of Table A to avoid registering articles.

Q.  Can I choose any name for my company?  See Business Names
A.  No.  Several regulations can affect your choice.  For example, all company names must end with the words 'Limited', 'Unlimited', 'Public Limited Company', or their abbreviations or Welsh equivalents.  Certain companies may apply for exemption from using 'Limited'.

All companies which are commonhold associations must end their name with ‘commonhold association limited’ or the Welsh equivalent.  Right to Manage companies must end their name with ‘RTM company limited’ or the Welsh equivalent.

All companies which are community interest companies (CICs) must have names which end with the words ‘community interest public limited company’, ‘community interest company’ or their abbreviations or Welsh equivalent.
 
Q.  Could my choice of company name be rejected?
A.  Yes, if:
•    It is 'the same as' a name already on the index - see question below.
•    It includes the words 'limited', 'unlimited', 'public limited company' or ‘community interest company’ anywhere except at the end of the name.  This applies equally to abbreviations or the Welsh equivalent of the words.
•    It ends with ‘commonhold association limited’ or the Welsh equivalent (unless the company is a commonhold association).
•    It ends with ‘community interest public limited company’, ‘community interest company’ (or abbreviations or Welsh equivalents) unless the company is a community interest company, its use would be a criminal offence.

In addition, some names need the approval of the Secretary of State before they can be registered.  These include names which contain words prescribed by regulations (see question 4 below) and names which suggest a connection with central or local government.  If these categories are avoided, you can normally have your choice of name.

Before you apply to set up a company, or do anything to change its name, it is a good idea to search the index at Companies House to see if there are already any companies with names similar to the one you want.

Q.  What does 'the same as' mean?
A.   When deciding whether a name is 'the same as' another name, the Registrar ignores punctuation, the company's status, 'the' at the start of the name, and words like 'company (or co)', 'and (or &) company (or co)'.  A name that sounds the same as one already on the Company Names Index may be accepted if the two names are spelled differently. 

For example, if the name 'Hands Limited' is already registered, then the following would be rejected and company formation not allowed:

Hands Public Limited Company (or PLC)
H and S Limited (or Ltd)
H and S Public Limited Company (or PLC)
H & S Limited (or Ltd)

Or any of the above, with the addition of 'Company (or Co)' or 'and (or &) Company (or Co)'