Frequently Asked Questions: Incorporating a Private Limited Company

What is a private limited company?

This is the most common form of corporate vehicle in the UK. Once a company is incorporated, it is treated as a distinct legal entity meaning the company can contract with third parties and incur liabilities. In addition, obligations of the company are not treated as obligations of the shareholders that essentially own the company, or the directors that run the company.

Is there more than one type of private limited company?

Yes. There are private companies limited by shares and private companies limited by guarantee. The former means that the shareholders’ liability is capped at the amount unpaid on their shares (including the nominal amount and any premium on top). The latter means the shareholders’ liability is capped at the amount they have agreed to commit to the company. In the UK, private companies limited by shares are more common.

I’m not from the UK and I don’t live there – can I still incorporate?

Yes. There are no restrictions on where the directors of the company originate from or reside on a daily basis. The only requirement is that the company’s registered office is within the UK.

How can I incorporate?

There are two main options – you can either purchase a ready-made “Shelf Company” from a formation agent (“Agent”) (a quick internet search will bring up a number of Agents) or incorporate a tailored company from scratch.

If you decide to purchase a Shelf Company, you will need to tailor it to suit your needs e.g. change the company name, appoint the directors you want to run the company and issue shares to amend the issued share capital. If you decide to incorporate a new company, you can again use an Agent or simply register the company online using the Companies House website. This will allow you to tailor the company from the outset with the correct name, directors, shareholders and number of issued shares. See our Checklist for Setting Up a New Private Limited Company in the UK for more information about what you need to register the company.

What is Companies House and who is the Registrar of Companies?

Companies House is a government agency that is responsible for registering and administering all limited companies in the UK. This is where the incorporation documents and all subsequent company filings are sent. The Registrar of Companies for England and Wales is an individual that heads up Companies House and holds the chief executive position. Their office is based in Cardiff, Wales.

What can I call my company?

You will need to ensure that the name is not already being used by another company. The easiest way to do this is to carry out a ‘company name availability search’ on the Companies House website. This will show you whether there are any companies already in existence with similar names that would prevent your name from being registered. Your company name also cannot be offensive, suggest a link with a government or local authority or contain a ‘sensitive word’ without obtaining permission (a list of which can be found on the Companies House guidance on Incorporation and Names).

You should also consider whether the proposed name infringes on another company’s trademark. While Companies House will not necessarily prevent you from incorporating with that name, you may face action from the company holding the trademark following incorporation. For more information on this area, please see the article Naming Your UK Company.

What is a registered office?

The registered office is the official address of the company where all statutory documents from Companies House will be sent and which will appear on all public documents.

How can I obtain a registered office if I have no address in the UK?

You can use a PO Box address provided the full address and postcode is given and this is validated by Royal Mail. Alternatively you can use the services of a formation agent to specifically provide registered office address services. In any case, you will need an address where the company’s records can be kept and made available for inspection at.

Who can be a director of my company?

A private limited company must have at least one human director, who must be at least 16 years old. You can also have corporate directors. There is no maximum number prescribed by law although this is something you can impose by adding a clause to the articles of association.

Do I need to appoint a company secretary?

Not unless you want to. There is no mandatory requirement for a private limited company to have a corporate secretary.

What are the articles of association?

The articles of association provide a framework for how the company should be managed by the directors. Amongst other things, they outline the directors’ powers to call board meetings and allot shares, and set out the rights afforded to shareholders. Most companies are set up using Model Articles, a government approved standard document, that can then be tailored to suit the company’s particular needs.

What is a certificate of incorporation?

This is a certificate issued by the Registrar of Companies House to document the incorporation of the company. The certificate will record the company name, number and the date the company is incorporated.