An Incorporation (Inc.) is the forming of a new corporation, a corporation being a legal entity that is effectively recognized as a person under the law. In the U.K., the process of incorporation is generally called company formation. The United Kingdom is one of the quickest locations to incorporate, with a fully electronic process and a very fast turn around by the national registrar of companies, the Companies House. Many companies today are incorporated electronically. The electronic process can be accessed using compatible software that works with the Companies House eFiling service and an account with Companies House. Company formation agents, such as Blue Sky Formations, have direct links into Companies House, to look up the company name, and submit the company. View our Company Formation packages today, and find out we can help with your company incorporation!
A business cannot operate as a limited company until it has been incorporated at Companies House under the Companies Act 2006. Establishing your business as a company means the directors are required to file certain documents every year such as annual accounts and an annual return. They must also inform Companies House about any changes, such as the appointment or resignation of directors or a change to the company's registered office. There are a few different types of companies that can be incorporated in the UK: Private company limited by shares, Private company limited by guarantee, Private unlimited company, and Public limited company.
Private company limited by shares: This company has a share capital and the liability of each member is limited to the amount, if any, unpaid on their shares. A private company cannot offer its shares for sale to the general public.
Private company limited by guarantee: This company does not have a share capital and its members are guarantors rather than shareholders. The members' liability is limited to the amount they agree to contribute to the company's assets if it is wound up.
Private unlimited company: An unlimited company may or may not have a share capital but there is no limit to the members' liability.
Public limited company: A public company has a share capital and limits the liability of each member to the amount unpaid on their shares. It may offer its shares for sale to the general public and may be quoted on the stock exchange.