Guide to UK Company Incorporation

The United Kingdom (“UK”) has long been recognised as an international business hub. Despite having a reputation of being a business-friendly state, the UK company incorporation process can be confusing at times. In this article, we look to share guidance on what the UK company incorporation process entails.

1. Decide on a Company Name
Deciding upon a company must be done so with consideration made to the various company naming rules set by the UK government – luckily these rules are not extensive. In general, UK company names must conform to the following:

1. A company name cannot be the same as, and cannot be considered too similar to an existing UK company’s name or trademark
2. The name cannot be considered offensive
3. The name cannot suggest a connection with the UK government, unless prior approval has been granted

To facilitate this step of the UK company incorporation process, applicants can utilize the Companies House register to inspect the availability of their desired company name.

2. Select Your Company Directors and a Company Secretary
Upon deciding a company name, steps must be taken to select individuals who will undertake key positions within the company, specifically the company director(s) and company secretary.

Company Director

Company Secretary

3. Decide on the Company Shareholders / Guarantors
Companies who are limited by shares must decide on the initial shareholders and the particulars surrounding the type of shares they will issue. This information must be provided during the UK company registration process, specifically:

Oftentimes, a company can be limited by guarantee whereby an individual/party recognised as the guarantor will promise an agreed amount of money to the company in the event that it cannot pay back its debts (“guaranteed amount”).

Companies that are limited by guarantee must have at least one guarantor and an agreed upon guarantee amount.

4. Identify People With Significant Control (“PSC”) Over Your Company
UK companies are required to maintain a registry of their beneficial owners and those who exert a large influence over the company. In other words, they must identify, and record the individuals who own, control, or have significant influence over the company. For completeness, the UK government considers any individual to own 25% or more of a company, to be a PSC.

During the incorporation process, a UK company must:

Any further changes to a company’s PSC must be disclosed to the Companies House within a further 14 days of any changes.
Furthermore, PSC rules will vary for Scotland incorporated companies. Parties who are contemplating incorporating a UK company in Scotland can refer to the UK governments relevant resources.

5. Prepare Documents Agreeing on How to Run Your Company
To facilitate the UK company incorporation process, all companies must produce a Memorandum of Association and an Articles of Association.

Memorandum of Association

Articles of Association

6. Obtain a Registered Office Address
All UK incorporated companies must maintain a registered office address where all official communications will be sent. This address must be obtained and ready for use before one begins their UK company incorporation process.

All registered office addresses must meet the following criteria:

Oftentimes, non-residents will utilize the services of an agent to obtain a registered office address. These services are permitted but one must ensure that the address obtained meets the above criteria or they face the possible risk of delaying the company incorporation process. Lastly, it is permitted to utilize a home address as a registered office address.

7. Identify Your Company’s Standard Industrial Classification of Economic Activities (“SIC”) Code
The Companies House uses SIC’s to help understand the nature and scope of business for UK companies. When setting up a company in the UK, a SIC code must be provided to the Companies House.

The Companies House has provided an online search engine to help applicants identify the SIC code relevant to their business.

8. Submit Your UK Company Registration Application
The Companies House is the UK’s official registrar of companies and is the government entity where all UK company incorporation applications should be sent to.

The Companies House allows for parties to submit their UK company registration application either online, by mail or also by using a registered agent to act on your behalf. Those who are considering completing this process by mail should download form IN01. In addition, while non-residents are not required to venture to the UK to complete this process (as it can be completed completely online), all methods of application will require the submission of the above mentioned information.

In the event that an application is rejected, the Companies House will return all application documents and request for adjustments to be made accordingly to rectify any identified errors or omissions of information.

Upon successful company registration, applicants will receive a Certificate of Incorporation from the COmpanies House that confirms the company has been legally formed.

9. Other Considerations
Upon successful UK company incorporation, the company directors must ensure that the company registers for UK corporation tax and as an employer with Her Majesty’s Revenue and Customs (“HMRC”).

In addition, several ongoing obligations must be met.

Conclusion
UK company incorporation may seem complicated at first glance but it doesn’t have to be. The FastLane Group has extensive experience assisting SMEs in company incorporation in countries around the world. Please contact the FastLane Group for help!