Limited Company Formation

[MrC]

Hi, I used to have a Ltd company about 5 years ago when I was an IT Contractor (pre -IR35) but have since closed this down.

I'm looking to set one up again to cover a variety of areas, from IT Consultancy, to perhaps opening a retail shop (mid-long term).

I may have lots of questions, but to start with; is there any dangers with using one of these 'online' companies for setting up a Ltd company, like the ones that cost < £40?

Are there any issues with using their affiliated services to use a registered office that is not my home, thus avoiding the obligation to put on my house that it is a registered office (I never did before, but realise I should), avoid somebody coming to burn my house down if I upset them, and so that I don't have to change it if I move house (and therefore the stationary).

This sounds like a plan to me, but I don't know if there are are hidden problems, that company going bust or moving I guess, but that is just a Royal Mail redirect and some paperwork for Companies House.

[Ian J]

MikeH is the resident forum expert on such matters and hopefully he will be along to answer all your questions

[BMS]

Hi MrC

There a lot of company formation agents out there and no doubt some are better than others.

I used a company called "companies made simple", they are a subsiduary of an accountants called Westbury Accountants. They appear to be fine and have had no problems with them.

I could also recommend "quickformations" as a realiable company.

It seems to be you get what you pay for, the cheaper optins may not offer anything other than formation, with sevices like registered office and company secretarial services costing more.

What I would suggest to you is with organisations like IR, VAT use your business address or home address for correspondence, they will be happy with this and you will get most of the important stuff coming direct to you, you can use a registered office address and trading address for your clients.

[MrC]

Thanks BMS, quickformations was the one I was looking at.

Is it right that you can register without specifying a specific business area? Did I read you can register as 'general commercial' company ?

[BMS]

Hi MrC

When using a formation agent, the articles and mems are designed such that your company does not have a specific area of operation.

For example Business Management Solutions (UK) Ltd's mems read :

at item (A) "To carry on business as a general commercial company"

at item (B) " To carry on any other trade or business which can, in the opinion of the Board of Directors, be advantageously carried on by the company"

In general terms if it is profitable you can do it !!!

If you are using "quickformations" ask to speak/send an an e-mail to Richard Osborne and tell him that Paul at BMS (UK) Ltd sent you ( he will either put the phone down or be very helpfull ..... just kidding)

Hope this helps and if there is anything else I can be of help with do not hesitate to PM me.

[keys]

I have registered a number of Ltd Co's using an online service. I use one for trading and the others are dormant. I use their address as registered office and have found the service to be excellent.

I have seen several similar company formation services recommended by people, and as yet no real criticism of any others.

Forming a Ltd Co is very easy. If you read forum posts from accountants on this subject they will stress that the really important part is getting all the basics right so that the company is setup to achieve your objectives, or put another way mistakes can be expensive to rectify at a later date.

[David Haycock]

I set up 2 Ltd co's with UK PLC and had no problems

[keys]

I have registered a number of companies through UK PLC, they are not the cheapest, but near enough, I think the service and online control panel are excellent.

[MrC]

Thanks for the suggestions.

I am thinking of setting up the company with a colleague and we will want to be able to offer shares to 'key employees' in the mid-term.

Would it be best to make us both Directors and then have a 3rd person as Secretary?

With respect to shares, my last company, if I remember correct, had a 1000 shares, of which 1 was paid up and allocated with a value of £1. This allowed to me to allocated the other 999 as and when.

If this the way to do it, i.e. 1 share each, and 998 available for future distribution. So, if we wanted to give 6% to A.N.Other we would increase the allocated to 100 and split 47,47,6 ?

[Joyous]

One of the two directors can also act as company secretary, it’s only if the company has a sole director that a separate company secretary has to be appointed. However if you want to appoint a third person, feel free.

The ratios that you’ve suggested are fine but bear in mind that if you wish to allot more shares but keep this holding at 6% you’ll have to increase your issued share capital.

Don’t forget to send in your form 88(2) or you’ll have Companies House on your case.

Regards

Joy