LTD Company FAQs

A limited company is a separate entity created by incorporation at Companies House. Its profits, losses, assets and liabilities are its own. The company is owned by its members (the shareholders) and run by the director (or directors) whose assets are protected from loss if the business should fail. This is sometimes referred to as limited liability. Because a company has a life of its own the business can continue despite the resignation or death of any directors or shareholders and the sale of the business or the introduction of outside investors are simplified. Reasons for wanting or needing a limited company may include ownership of property, obtaining outside finance, taxation, status and protection from risk.

Once incorporated Companies House issue a certificate and company registration number. This becomes the company's ID so to speak. You can change the company's name at any time but you still keep the registered number.

First and foremost, the principal benefit of trading via a limited company has always been the limited liability bestowed upon the company's officers and shareholders. As a sole trader or other non-limited business, personal assets can be at risk in the event of a failure of the business, but this is not the case for a limited company.

There is no obligation for a limited company to commence trading within any set time period after its incorporation. This means that the formation of a limited company is one simple and low cost method to protect a business name. Whilst this does not in itself give any rights to use of the business name, many clients form companies in anticipation of future development of new businesses or in order to protect the limited company name of an existing non-limited business for the future. No two limited companies can exist with exactly the same name.

Every company director has a personal responsibility to ensure that statutory documents are delivered to the Registrar of Companies as and when required by the Act. In particular Accounts; Annual returns (Form 363); the appointment of a new director or secretary - use Form 288a; an officer's resignation from the company - use Form 288b; Changes in an officer's name or address or any the other details

Our system uses the Electronic Filing facilities at Companies House. This means that whatever the time of day, when you place an order on our website your request is sent instantly to Companies House for processing. Companies House then aim to respond to electronically filed documents within 4 working hours. Although this is not always possible, it does generally mean that if you placed an order before midday on a normal working day we can have your company incorporated by the end of that same day. Our best turnaround time to date has been a company formation completed in less than one hour.

It is important to check that the name you want is acceptable to Companies House.

Briefly, the restrictions are that:

You cannot register the same name as another company;

The use of certain words is restricted;

Names likely to cause offence are not allowed.

It is also important to check whether your chosen name is similar to any other names already on the register. If your chosen name is too like another name, an objection could be made within the 12 months following the incorporation of your company and you could be directed by the Secretary of State to change the company's name

Certain words and phrases are classed as sensitive by the Department of Trade and Industry. If this is the case you will be prohibited from using them or you might have to justify you are entitled to use the name. For more information on this subject see Companies House notes CHN2, CHN3 & CHN11.

This is the Official certificate that Companies House issues when a company is incorporated. It will include the date of incorporation, your company name and registered number. We will email this to you along with any other relevant documents.

These are the rules for running the company. They show what the company can do by law, where its registered office should be, how much share capital can be issued etc. Unless you have requested differently your memorandum and articles will state that the company's registered office will be in England or Wales and your authorised share capital is £1,000 for limited companies and £50,000 for PLC's. Your bank will require a copy of your memorandum and articles of association when you open an account for the company.

The company must state its name, in legible lettering, on the following:

All the company's business letters;

All its notices and other official publications;

All bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by, or on behalf of, the company.

A private limited company must have at least one director and one company secretary Formal qualifications are not required, but unless there are two directors, a person cannot be the sole director and secretary.

A PLC company must have at least two directors and the company secretary must be qualified to hold the position.

Anyone, of any nationality anywhere in the world can be appointed director unless:

They have been disqualified by court order

They are an un-discharged bankrupt

They are a foreign national subject to restrictions imposed by the UK Government.

The registered office is an address in England or Wales (or Scotland if your company is registered there) where documents can be delivered to the company.

Companies House uses the Post Office address file to verify addresses; so, to avoid delays, please ensure that your proposed registered office address is recognised by the Post Office and always give the correct postcode on forms sent for registration.

If a company changes its registered office address the new address must be notified to Companies House on Form 287.

This can be done online using our website free of charge, as often as you need to.

By law there must be at least one shareholder who subscribes to take at least one share. This is the number of shares your initially authorise your company to issue to shareholders/subscribers. Usually a share issue of 1000 with each share valued at £1 is used.

It is worth nothing that although you authorise 1000 shares, if only 1 share is issued to one person, that person becomes 100% shareholder in the business.

If you wish to issue further shares up to the authorised share capital form 88(2) should be completed and sent to the Registrar of Companies.

You can increase your authorised share capital by passing an ordinary resolution at a general meeting. A copy of the resolution and Form 123 detailing the proposed increase must then reach Companies House within 15 days of being passed.

If you wish to register for VAT, it is a simple procedure. If this is on a voluntary basis, you must provide proof of the company’s intention to commence trading. In any case, the company must register for VAT once its turnover reaches£58,000.

In general if you are selling to the public your prices will be lower if you do not charge VAT. If you are selling to business the VAT will not affect the cost to the business, and you will be able to reclaim all your VAT table costs. (Most things apart from Rent, Rates and Salaries)

Private companies that have not traded or otherwise carried on business for at least three months may apply to the Registrar to be struck off the register.