How to set up a company in the UK

The United Kingdom has always defined itself as a country of businesses. Unlikely of other countries, the UK is one of the countries in the world where you can set up a company without living or residing. 

The process of setting up a company could take less than a week. Company formation agents can help speed up this process. Before setting up a company, knowing which type of company you would like to create is important.

Type of Companies in the UK 

In the UK, there are four standard and popular types of companies: 

• Public Limited Companies

Public Limited Companies or PLCs are types of companies that are legally allowed to offer shares for sale to the public. A PLC is a legal entity in its own right, but the liability of the members is limited.

• Private Company Limited 

Private Limited Companies are the most popular types of companies in the UK. A private limited company is an entity in its own right, and shareholder assets are not linked to the company.

• Companies Limited by Guarantee

This type of company is generally used by not for profit organisations and community-based groups. With a company limited by guarantee, the profit generated by the company operation will be re-invest into the company. 

• Limited Liability Partnership

Also called LLP, the Limited Liability Partnerships are a type of company generally run by two or more partners. It is quite often used by accountants or solicitors who have teamed up under one company. 

The most common company registered by non-residents is a private limited company. It is important to state that a non-resident is someone who does not domicile in a given region but has a business or other interest in that region. 

Legal Requirements for Limited Companies

Limited companies in the UK must have at least one director. The director can be the company secretary as well. 

You will need a registered office address to which all official documents or legal notices are sent. The registered address must be based in the UK, but the trading address does not need to be in the UK.

Check the responsibilities of a company director

How to set up a limited company

You can choose to register a company yourself or through a company formation agent. As a non-resident, we will advise looking for a company formation agent to fast-track the process. Most of them have a dedicated package for non-resident directors. 

There are steps to follow when forming a limited company:

1. Choose the company name

The company name must not be the same name as another registered company. It cannot contain potentially misleading words such as Chartered, Bank, British, English... You can use the company house website online tool to search if your chosen name is still available. 

2. Choose the company officers 

As previously stated, a private limited company must have at least one director or company officer. A public company must have two directors and a company secretary. 

3. Documents required:

• A Memorandum of Association (It is a legal statement signed by all parties forming the company, including the names and addresses of the directors and shareholders)
• The articles of Association (It is a legal document that states shareholders' rights and the powers of the company directors over the business)

**Updates**

The UK company house added 03 new rules that companies have to follow during their registration. The new rules will also be applied to existing companies.

• New rules for registered office addresses
• Requirement for all companies to supply a registered email address
• New lawful purpose statements.

The new registered office rules state that companies must have an appropriate address as their registered office at all times. These changes mean companies will no longer use a PO Box as a registered address. Companies that do not have an appropriate address could be struck off the register.

Since the 4 March 2024, companies are required to give a registered email address to the Company House. The email address will be used for all communication between the Company House and the company and will not be published on the public register. Existing companies will need to give a registered email when they file their next confirmation statement.

The statement of lawful purpose is a statement confirming that the formed company was created for a lawful purpose. The subscribers (company shareholders) will also need to confirm that the company's intended future activities are lawful. The Company House will not accept any documents if these statements have not been confirmed.