The process of forming a company is not straightforward. It is essential that a company is set up properly as there are complicated issues to resolve, particularly if there are two or more people involved. Getting it right from the start to deal with important issues avoids legal difficulties or having to make costly changes later.
The name of a new company is subject to complicated rules and choosing the wrong name can have expensive legal implications.
Company directors are responsible for the day-to-day operations of the company and as a result, they have legal responsibilities. Directors may be the same people as the shareholders, but they are not required to be. It is essential to decide which rules two or more directors will follow and place these in the articles of incorporation or a shareholders' agreement.
The shares of the company are owned by its shareholders, and they are the ultimate owners. The company's articles of incorporation or a shareholders' agreement should have provisions that protect the financial interests of shareholders if there are two or more of them. If a shareholder does not own a majority of the shares, he or she may be vulnerable and need legal protection.
A company's ownership is divided into shares. Companies are often organized by their share structure, and new companies should determine their share structure from the beginning and set it out in the articles. The share classes can be changed later, but that is more expensive than setting them up when the company is first formed.
To register your company you need to supply information to Companies House about the company name, address of registered office, the directors, members and (unless a company limited by guarantee) the shares to be issued. Prepare the required information before you begin to save time. The information required will vary according to whether it is a private company limited by shares, a limited liability partnership (LLP), or a public limited company (PLC).
A company must provide detailed information about its directors, shareholders, and share capital before Companies House will register it. So, ensure you have all the relevant information to hand and you’ll be ready to register your company online.
If you would like any legal advice or guidance on setting up a company, please post your legal requirements onto our website to find a solicitor who can assist you today.