Registration is the first step in creating a company. At first glance, the process is simple and self-explanatory. This simplicity, however, can be deceptive, and failures at an early stage can cause problems further down the line.
Both flexibility and efficiency are essential to successful registration. The solution for every new company must be adapted sufficiently to the needs and desires of its founders. Adopting a cookie-cutter approach cuts early costs but can lead to significant setbacks down the line.
Equally, in the early stages of a company, keeping costs low is a priority, meaning that the process must be as efficient as possible.
How to register a new company in the UK?
The process of registration depends on the type of company that is being registered, as do any legal questions. There are categories of companies that can be registered in the UK.
- Sole Trader
- Limited Company
Sole traders and partnerships
Sole trader and partnership company structures are simple, and the registration process for them is straightforward. Under both, owners are entitled to profits (after tax) and liable for debt. To register the company, owners must simply register for Self Assessment with tax authorities (HMRC).
Legal advice can be critical, even in navigating the seemingly self-explanatory registration process. Registration as a sole trader or in a partnership comes with responsibilities, namely, reporting and record-keeping for tax purposes. The responsibilities can vary depending on the nature of the company.
In setting up a partnership, the initial agreement between partners and its legal significance cannot be overlooked. A well drafted partnership agreement lays the foundation for a successful company. In the event of dispute or dissolution, provisions in the agreement can prevent ruinous legal battles.
The process for registering a limited company entails setting up a separate legal entity and is more complex. The structure is preferred by many companies with a view to expand significantly in the future, as it allows for raising capital quickly and does make owners liable for company debt.
There are a number of different options within the ambit of limited company structure, and registration varies depending on the specific type of limited company.
Overall, the process requires filing documentation online with the Companies House. Some of the required information is very basic: company name, address, directors. But other requirements are more technical and offer ripe ground for mistakes that lead to significant legal consequences.
Tailored legal advice is especially crucial in drafting Articles and Memorandum of Association. The first, essential, requirement is that statutory requirements are followed. Moreover, the Articles of Association serve as the founding document of the company, outlining its structure and internal rules.
Articles that are poorly drafted or do not reflect the company’s unique nature and purpose set the company on a path to significant difficulties in the future.
Registering a company is easy, especially with the right advice. Simple and efficient legal support is an early investment that can set the scene for long-term success, don’t hesitate to get in touch.