Our team of commercial solicitors are business advisors who are able to advise on the legal aspects (and practical aspects) of company formation.
All limited companies must be registered at Companies House. To do this, you need to decide on a:
- Company name. When choosing a company name, there are certain legal requirements to be followed and our commercial solicitors can assist you in ensuring that those legal requirements are met.
- Registered office. It is usually the case that the registered office is the premises from which the company trades, but it can also be your accountants or home address. You need to check with your mortgage lender if you wish to use your home address as a registered office.
- The officers (company directors and a company secretary).
- A company will need a least one director over the age of 16 and one shareholder but there is no longer a statutory requirement to have a company secretary.
- The shareholders. A shareholder must contribute the amount unpaid on their shares; but no more if a company goes into liquidation. In the vast majority of cases, the shares will be fully paid, so that no contribution towards the company’s debts has to be made. However, a shareholder will lose his shares if the company fails and therefore his investment.
What is a limited company?
A limited company is its own legal entity meaning that it trades under its company name, and is separate from the directors or shareholders. It is the company that enters into contracts with suppliers and customers. Shareholders and directors are therefore not responsible for the debts of the Company (unless the shareholder/director has guaranteed the Company’s loans and debts i.e. a personal guarantee). As business services solicitors we are able to advise our clients on how this works in practice.
A limited company offers business owners limited liability and protection, and are increasingly used by new start-up businesses who want to raise finance by way of investment in their business.
A limited company can take one of two forms:
- Company limited by shares – this is the most common form of company used by business, however if your business is a non-profit making business, a more suitable limited company structure would be
- Company limited guarantee – here members (instead of shareholders) have a limited amount that they would contribute if the company was wound up – normally this is limited to £1.00 each.
A limited company will need a memorandum of association and articles of association. These are its constitutional documents which govern how the company in very brief terms is to be run. Whilst most companies can be set up with a standard set of articles of association, as business services solicitors we are able to provide bespoke articles of association from the date you set up business.
There are other forms of company: a private unlimited company has no share capital and its liability is not limited which has the added advantage of being more flexible as there is no need to file an annual return at Companies House but they are a rare form of company used by few.
Another form of company is a public limited company also known as a PLC. This is a company where members of the public can purchasing shares in the company. Some PLCs are listed on the stock market others are not.
If there is more than one shareholder then it is highly recommended to look at drawing up and entering into a Shareholders Agreement.
Contact our team of business solicitors in Sheffield today
Speak to a member of our team today by contacting us on 0845 225 2635 or completing our online contact form here.