So you want to start a company? Great. Welcome to the world of entrepreneurship. This article addresses the legal process of forming a company and what that means. We won’t be discussing the ins and outs of running a business here.
Forming a company, as it’s legalistically known, is actually quite straightforward nowadays. It’s very inexpensive and you can do it in as little as three hours.
There are lots of companies that will do it for you for as little as £30. Or you can head directly to Companies House and do it for £13.
Clearly, if you’re going for cheap, you’re going to go the Companies House route, although as you’ll see, the page is less sales-focussed and less easy to understand. But that may be false economy. There are a number of advantages to going through an actual lawyer.
Find An Eligible Company Name
It’s not legal to call a company anything you want. There are a few rules. For example, if you wanted to call your company BIG FISH INTERNATIONAL in an effort to make it sound large, and perhaps raise your status, you wouldn’t be able to unless you could prove that your business operates in at least three different countries.
Check The Company Name You Want Is Available
Two companies are not allowed to have the same name, and sometimes they’re not allowed to be very similar either. Most formation companies and Companies House will tell you if the name you want is allowed or already taken.
Name The Director(s)
There needs to be at least one company director. If you’re reading this article, it’s probably you. You’ll need your name and address and how many shares you are going to own.
Number of shares and value of each share
If you’re the only shareholder of the company, there only needs to be one share. If there are more intended shareholders, divide the company into as many shares as is necessary to give each shareholder the percentage ownership you want them to have. This will more than likely depend on what they are bringing to the table in terms of start-up capital and skills.
Submit Your Application
Send it! You’ll have to pay £12. And hopefully you’ll get an e-mail within a few hours stating that your company has been formed, complete with a company number.