Choosing to form a new limited company can be a stressful decision. Before you make this decision, there are a few questions that you may want to ask yourself. Determining that a limited company is better than a sole trader or partnership can take some research. So, before you start registering your new company name or choosing a location for your business, ask yourself a few key questions so that you know without a doubt that a limited company is your best choice.
You may want to consider whether a limited company is actually better for you than another legal entity. While the majority of all UK businesses are operating as limited companies, this is not the right decision for every business. You have to understand the requirements for registering your company as a limited company. You will need to provide a unique business name, a director, and a few other key factors before you can legally register your company with Companies House. If you are not prepared to provide these things then another legal entity may be a better choice.
While you do not need lots of people when forming a limited company, you do need a director and a shareholder. This can be the same person and it can be the owner but you should understand that each of these roles carries responsibilities. If it will be too much for you to handle with the running of your business, you will want to choose someone else for these roles, and you can have as many directors and shareholders as you like but you must choose at least one of each. Note also that different company types and articles of association can stipulate different numbers for these requirements.
If you are acting as a director for your company then your home address could be made public. Note that Companies House will need a residential address for each director in your company. You can also provide a service address, which is an alternate address for your residential address. If your plan is to run a home business then you will need to provide your home address or secure an alternative address if you do not want your residential address being made public.
If you choose to register your company as a limited company but you change your mind and want to change the details after it has been registered, this is possible. It is also a complicated process however, depending on the nature of your change. Make sure that you have everything in order before you form your company to avoid this frustration in the future.
If you are still unsure of whether or not your company should be a limited company then you can seek the assistance of a formation agent. Formation agents are experienced in helping to set up new businesses and can instruct you on the best way to form your new business. These experts do this on a regular basis and often have a bit more insight into legal entities, forms and timelines.