| When starting a business, a large number
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| | issued to the shareholders in return for
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| of people go down the route of forming a
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| | the appropriate sum of money. Ownership
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| limited company or, to give it its full
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| | of shares gives the shareholders the
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| title, a limited liability company.
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| | right to vote at company meetings and
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| The alternative for someone starting up
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| | entitles them to be paid dividends on
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| in business on their own is to trade as a
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| | their shares based on the profits of the
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| sole-trader. There is less formal
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| | company.
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| paperwork involved in going into business
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| | Any shares which remain unsold are known
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| as a sole-trader, but a limited company
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| | as unallocated shares.
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| can offer a number of advantages. These
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| | It is a good idea to seek advice from an
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| include greater opportunities to reduce
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| | accountant at this point, in order to
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| the amount of tax your business pays, and
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| | make sure that the allocation of shares
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| increased protection of your personal
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| | is done in the most tax efficient way for
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| assets in the event of the business
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| | your own particular circumstances.
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| running into problems.
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| | The final decision to make before forming
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| This article explains how a limited
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| | your limited company involves the
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| company is structured, and details the
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| | company's registered office. Under
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| steps you need to take to form your own
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| | Company Law, all companies are required
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| limited company.
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| | to have a registered office.
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| The first thing you will need to do is to
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| | The registered office of a company is the
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| decide on a name for your new limited
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| | address where official documents can be
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| company. Companies House maintains a list
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| | served and where certain statutory
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| of all companies registered in the UK,
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| | documents relating to the company are
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| and you can use their website to check if
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| | kept and can be made available for
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| the name you want is available or whether
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| | inspection.
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| it is already in use by another company.
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| | Common choices for the registered office
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| Whatever name you opt for will have to
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| | address are either the home address of
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| have the word "limited" (often
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| | one of the directors of the company, or
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| abbreviated to Ltd) at the end. So if,
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| | the office of the company's accountants.
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| for example, your wanted to call your new
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| | Having made all these decisions, you now
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| business "The Ultimate Widget Company"
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| | have all the information you need to form
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| then the full name of your limited
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| | your limited company.
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| company would be The Ultimate Widget
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| | The quickest and cheapest way to form a
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| Company Limited or The Ultimate Widget
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| | company is using one of the many online
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| Company Ltd.
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| | company formation services. For a fee of
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| Your new company will need at least two
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| | around £30 to £50 they will process
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| people to act as officers of the company.
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| | your application with Companies House and
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| One of these people will be the company
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| | send you all the required company
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| secretary. The other person will be a
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| | documents by email for you to print out.
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| director of the company. If you wish, the
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| | For an additional fee, they will normally
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| company secretary can be a director as
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| | provide printed copies of the documents
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| well, but he/she cannot be the sole
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| | if you wish, but for most people this is
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| director.
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| | not considered necessary.
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| The company secretary has certain legal
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| | An alternative to forming the company
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| responsibilities such as ensuring that
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| | from scratch yourself is to buy what is
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| the company submits annual returns to
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| | known as an "off the shelf company".
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| Companies House and that the company and
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| | Off the shelf companies are companies
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| its directors operate within the law.
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| | which have been formed already by a
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| Many people going into business on their
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| | company formation agent, but which have
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| own choose their spouse or another family
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| | not yet traded. You pay a fee to the
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| member to fulfil the role of company
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| | formation agent and they then transfer
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| secretary. Where two or more people are
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| | ownership of the ready-formed company to
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| forming a limited company, one of them
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| | you.
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| will often take on the job of company
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| | Obviously, with an off the shelf company
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| secretary in addition to being one of the
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| | you are restricted on your choice of name
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| directors of the company.
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| | for your company, as you can only pick
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| An alternative is to use the services of
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| | from the list of pre-formed off the shelf
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| a third party firm who provide company
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| | companies that the formation agent has
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| secretary services to your business in
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| | available at that time. However, once you
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| return for an annual fee.
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| | have bought your company you can apply
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| The next thing to decide is how you will
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| | via Companies House to change its name,
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| allocate shares in your new company. You
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| | but there is a fee for this.
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| will need to specify how many shares your
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| | As off the shelf companies tend to work
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| company has and the value of them.
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| | out more expensive and less flexible than
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| Typically, companies are formed with 100
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| | forming the company yourself, it makes
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| or 1000 shares with a value of £1 per
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| | sense in the majority of cases to form
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| share.
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| | the company yourself using one of the
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| Some or all of these shares are then
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| | online formation services.
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