Company formation is the term for the process of incorporation of a business in the UK. It is also sometimes referred to as company registration. These terms are both also used when incorporating a business in the

Republic of Ireland Ireland ( ), also known as the Republic of Ireland (), is a country in Northwestern Europe, north-western Europe consisting of 26 of the 32 Counties of Ireland, counties of the island of Ireland, with a population of about 5.4 million. ...

. Under

UK company law British company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directive (European Union), Directives and court cases, the company is th ...

and most international law, a company or corporation is considered an entity that is separate from the people who own or operate the company. Forming a

company A company, abbreviated as co., is a Legal personality, legal entity representing an association of legal people, whether Natural person, natural, Juridical person, juridical or a mixture of both, with a specific objective. Company members ...

via the paper filing method can take up to 4 weeks but nowadays the majority of UK companies are formed the same day electronically. Companies can be created by individuals, specialised agents, solicitors or accountants. Many solicitors and accountants subcontract incorporation out to specialised company formation agents. Most agents offer company formation packages for less than £100.

Formation processes

Historical processes

A legal instrument known as a deed of settlement was used in 18th century England to regulate the activities of companies structured as

joint stock companies A joint-stock company (JSC) is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Shareholder ...

, permitting a private company to form a corporation without applying for a

royal charter A royal charter is a formal grant issued by a monarch under royal prerogative as letters patent. Historically, they have been used to promulgate public laws, the most famous example being the English Magna Carta (great charter) of 1215, but ...

or an act of Parliament. The deed of settlement named the individuals of the company as trustees of the assets jointly owned by the company. It also served to outline the rules applicable to the company's management.

Paper process

Under section 9 of the

Companies Act 2006 The Companies Act 2006 (c. 46) is an act of the Parliament of the United Kingdom which forms the primary source of UK company law. The act was brought into force in stages, with the final provision being commenced on 1 October 2009. It largel ...

, those forming a company must send the following documents, together with the registration fee, to the

Registrar of Companies A company register is a register of business organizations such as companies in the jurisdiction they operate under. Registration is normally mandated by the government of that jurisdiction. A company register serves a purpose of protection, acco ...

. Most incorporations submitted by paper take around 5 working days to be accepted. For detailed information see the

Companies House Companies House is the executive agency of the British Government that maintains the Company register, register of companies, employs the company registrars and is responsible for Incorporation (business), incorporating all forms of Company, co ...

guide. The cost of carrying out paper filing directly with

is £20 for an

unlimited company An unlimited company or private unlimited company is a hybrid company (corporation) incorporated with or without a share capital (and similar to its limited company counterpart) but where the legal liability of the members or shareholders is not ...

or £40 for a limited company. This fee does not include the cost of witnessing documents or preparation of memorandum & articles of association for the company, which would usually be carried out by a solicitor, accountant, or agent specialising in company registration.

Articles of association

The articles of association (often referred to as just ‘articles’) is the document which sets out the rules for the running of the company's internal affairs. The company's articles are delivered to the Registrar at incorporation. In the event that no articles are registered for the new company, the model (default) articles will be registered. This new procedure was introduced by the Companies Act 2006, Section 20. The articles can be amended at any time by special resolution which requires 75% or more of the eligible shareholder votes to be cast in favour of the resolution. A copy of the updated articles of association, together with the special resolution itself, should be delivered to Companies House within 15 days of the resolution passing.

Form IN01

This contains the intended situation of the

Registered Office A registered office is the official address of an incorporated company, association or any other legal entity. Generally it will form part of the public record and is required in most countries where the registered organization or legal entity ...

, (this will be either in England and Wales, Northern Ireland, Scotland or Wales), the details of the consenting Secretary and Director(s), details of the subscribers and, in the case of a company limited by shares, details of the share capital. The form also includes the Statement of Compliance that the requirements of the Companies Act have been complied with.

Memorandum of association

This contains the names and signatures of the subscribers that wish to form the company and, in the case of a company limited by shares, a commitment by the subscribers to take percentage of shares as contribution been made. A draft template is available on the Companies House website. It sets out the constitution of a company and the foundation on which the structure of a company is based. In other words, a memorandum of association is considered the charter or constitution of the company because it lays down the objectives of the company precisely and clearly, defines the scope of its relation with the investor and outside world.

Electronic process

The electronic process can be accessed using compatible software that works with the

eFiling service and an account with Companies House. Company formation agents have direct links into Companies House, to look up the company name, and submit the company. Different agents have differences in their processes caused by their website and software implementation. Companies House have a list of company formation agents that have passed integration testing.E-filing company formation agents
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Types of company

The following can be formed by registration at Companies House: *

Public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth of Nations, Commonwealth jurisdictions, and Republic of Ireland, Ireland. It is a limited liability co ...

(plc) *

Private company limited by shares A private company limited by shares is a class of private limited company incorporated under the laws of England and Wales, Hong Kong, Northern Ireland, Scotland, certain Commonwealth jurisdictions, and the Republic of Ireland. It has shareh ...

(Ltd, Limited) *

Company limited by guarantee A company limited by guarantee (CLG) is a type of company where the liability of members in the event the company is wound up is limited to a (typically very small) amount listed in the company's articles or constitution. Most have no share ca ...

Unlimited company An unlimited company or private unlimited company is a hybrid company (corporation) incorporated with or without a share capital (and similar to its limited company counterpart) but where the legal liability of the members or shareholders is not ...

Limited liability partnership A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit aspects of both partnerships and corporations. In an LLP, each partner is n ...

(LLP) *

Limited partnership A limited partnership (LP) is a type of partnership with general partners, who have a right to manage the business, and limited partners, who have no right to manage the business but have only limited liability for its debts. Limited partnership ...

(LP) *

Societas Europaea A (, ; "European society" or "company"; plural: ; abbr. SE) is a public company registered in accordance with the European corporate law, corporate law of the European Union (EU), introduced in 2004 with the Council Regulation on the Statute ...

(SE): European Union-wide company structure *

Community interest company A community interest company (CIC, pronounced "see-eye-see", or colloquially, "kick") is a form of social enterprise in the United Kingdom intended "for people wishing to establish businesses which trade with a social purpose..., or to carry on ...

(CIC) * European economic interest grouping (EEIG) *

Joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acce ...

Notes

External links

Companies House eFiling

Companies House list of formation agents
{{DEFAULTSORT:Company Formation Legal entities English law United Kingdom company law