Considering establishing your business as a private limited company in the UK? This decision marks the beginning of an exciting venture. However, it is important to note that the limited company registration requires more details than when you register yourself to become self-employed. The procedure requires providing additional information, including a unique company name, a Standard Industrial Classification (SIC) code, and detailed information about the company’s directors and shareholders.
This writing will explain everything you need to know before initiating the registration process, ensuring a smoother journey for aspiring business owners.
Unique company name
You cannot use an existing name that is already registered with other companies in the UK. When naming your limited company, ensure it is unique by checking the name’s availability through the relevant website: https://find-and-update.company-information.service.gov.uk/company-name-availability
Additionally, you can choose “Ltd” or “Limited” to follow your company name.
Standard Industrial Classification (SIC) code
The Standard Industrial Classification (SIC) code is a code required when registering a company, indicating the type of business activities. Depending on the production, sales, distribution, and service processes of your products, you may add multiple codes. You can check and choose the appropriate SIC codes using the following website: https://resources.companieshouse.gov.uk/sic/
Selection of directors and shareholders
You must appoint directors and shareholders for your company. A limited company can have one or more directors and shareholders. If a director owns a portion of the company’s shares, they can serve simultaneously as both a director and a shareholder.
Share allocation
If there is more than one shareholder in your company, share allocation is necessary for establishing and managing the company. You should determine the number of shares to issue, set the price per share, and decide on the distribution among shareholders. Based on this allocation, shareholders can receive profits from the limited company when it generates earnings.
For example, if a company issues 100 shares at £10 each and two shareholders split them 60/40, it results in a 60% and 40% ownership split respectively. Retained earnings after tax would be divided between the two shareholders according to their ownership percentage.
Address registration
To register your limited company with Companies House, a physical address in the UK will be required. This address is displayed publicly on the Companies House website and serves as the official location for receiving statutory mail and legal documents. You can change this address at any time through Companies House.
However, some business owners without a physical office in the UK face the dilemma of using their residential address for registration. While this is a viable option, it can raise privacy concerns as the address becomes publicly accessible on the Companies House website. For those who prefer not to disclose their personal address or non-UK residents, BH1 Accounting provides our clients with a registered office address service as part of the basic accounting contract.
There may be other procedures such as VAT registration or PAYE registration depending on your business structure and growth. For more detailed information on these matters, you can contact BH1 Accounting directly.
