Advocery for Setting up a Company

Thank you for getting in touch with me to confirm your decision to use a limited company structure for your new plumbing business.

You confirmed that you will be entering into business, which you would like to call “Plumb What May” with your sister, Eleri Martinez. You will both be directors of the company and will each invest £10,000 into it. You would like to set the company up as quickly and cost effectively as possible. As requested, I will advise you on the steps needed to set up a limited company so that you can complete the paperwork yourself.

Documents needed for incorporation

To “incorporate” or create a company you need to file a number of documents at Companies House and pay a fee. The documents can be filed electronically or by post and registration usually takes place within 5 days of filing.

The documents you need to file are:

1. A memorandum of association – there is a template for this on the Companies House website. The Memorandum simply records that you and Eleri wish to form a company and that you will be its shareholders.

2. An application for registration of a company. This is completed using a standard form (IN01), again available on the Companies House website. On this form you will need to record details such as type of company (here a private limited company), the names and addresses of the directors, the company’s registered office, how much initial capital the company has (£20,000 in your case as you are both investing £10,000) and the initial shareholdings.

3. The company’s constitution or rule book, which is known as the articles of association. This sets out the rules for running the company. There is a default set of articles, known as the model articles, which you may decide to use. If so, you do not need to file the articles at Companies House. You only have to file articles if you are changing the model ones. Most new companies start off with the model articles which can be altered at a later date by a decision of the shareholders.

You will need to check, on the Companies House website, that the name “Plumb What May” is available because two limited companies cannot have the same name.

Once the necessary documents have been filed and checked, a certificate of incorporation will be issued, which is like the company’s birth certificate.

Next Steps

As you are looking to do as much of the administration as possible, I suggest the best way forward is for you to look at the Companies House website for the standard documents I have mentioned. Once you have read through them, if there is anything on which you are uncertain, I would be happy to provide further advice.

As you and Eleri have not run a business as a limited company, I am happy to provide further advice on how decisions are taken and the roles and responsibilities of directors should you require it.

Please do not hesitate to contact me if you have any further queries.

Posted from SLPRO Z