04: Setting up

Many who start up a limited company use a registration agent, solicitor or accountant to help them with the setting-up process. Typically, fees for this type of service start at £100. A limited company must first be registered with Companies House.

One of the first things to do before registering is to check to ensure that the company name you want to use complies with the Business Names Act. The name of a limited company cannot be the same as any company on the Companies House register, and there are certain words such as 'British', 'Royal', 'Institute' and 'Society' that you cannot use without permission. You may face legal action for passing off as another company if you use a name too similar to one already registered.

Once you have a name and are ready to set up, there are a number of documents and forms that Companies House require you to fill out and send in before a company can be correctly registered and incorporated.

To set up a limited company, you need to create a memorandum of association and articles of association, which detail who will be running the business, what it will do and where it will be based. These documents must be forwarded to Companies House, together with standard registration documents Forms 10 and 12 and a registration fee.

If you need to set up a private limited company urgently – for example, in order to complete a contract – you may prefer to make an ‘off-the-shelf’ purchase.  Such companies are already incorporated and are ready to trade.