How to register a limited company: a contractor’s guide

Are you a contractor looking to set up a private company limited by shares? It’s no surprise.

You’re in good company…

The limited by shares model is the most popular company structure in the UK as it provides its owners(s) with financial protection, a level of tax efficiency not associated with the sole trader format, and can be formed with just one person involved, writes Mathew Aitken of 1st Formations.

Fortunately, the process for forming a limited company is remarkably quick and simple, with companies often formed on the same day that the applications are sent to Companies House (the UK’s official registrar of companies).

Here’s all the information you need to provide to register a limited company.

A unique company name

No two names can be the same on the Companies House register so your name needs to be wholly unique! It can’t even be similar to another name.

There are also certain words and expressions that can’t be used without necessary permissions being granted and presented as part of your registration.

For example, to use the word ‘King’ you must seek written approval from the Cabinet Office and, if you get the go-ahead, you must attach this approval as part of your application.

It’s common for contractors to use their name as their company name. This is fine to do, but it’s worth noting that, just like any other company name - it must end with ‘Ltd’ or ‘Limited’ (or ‘Cyf’ / ‘Cyfyngedig’, the Welsh alternatives)

You can check if your proposed company name is available using the 1st Formations name-search tool.

A registered office address

Next, you’ll need to choose the official address for your company and where government bodies such as Companies House, HMRC and the Information Commissioner’s Office will send you correspondence.

The address must be located in the UK but you need not have any presence at the address, provided that mail sent by the above bodies is seen by the company.

The registered office address is made publicly available on the Companies House public register. Because of this, business owners often choose to protect their personal addresses from the register and use their accountant’s or company formation agent’s address (provided those parties they have granted permission).  

Principal business activity

When you register a limited company, the government wants to get an idea of the type of trade you’ll be carrying out.

You provide this information by selecting 1-4 SIC (Standard Industrial Classification) codes. The list of codes will be presented to you, on-screen, as part of the registration process.

While you should do your best to be as accurate as possible, you will not be tied down to the industries set out in your SIC code(s). Your selection is merely to give the government an idea of the industry in which you’ll operate, and the work which you’ll do.

Director information

A director is the individual tasked with the day-to-day running of the limited company.

For each director in your company, you will need to provide the following (N.B. a company can be formed with multiple people -- or just one person, and if you’re a contractor, it’s probably the single-person option):

• Name
• Nationality,
• Date of birth
• Occupation
• Service address
• Residential address (this will not be viewable on the public register)

Shareholder information

A shareholder is the owner of the company.

For each shareholder (again, as a contractor, it’s probably just you), you will need to provide:

• Name
• Address
• Information about the shares held, including the type, value and currency

Next on Companies House, it’s a Person with Significant Control (PSC)

A PSC is the person who holds ultimate control in the company.

In the majority of cases, this will simply be a shareholder.

For each PSC, you will need to provide their:

• Name
• Nationality,
• Date of birth
• Occupation
• Service address
• Residential address (this will not be viewable on the public register)

At this PSC stage, you will also need to provide information on the nature of their control (you can choose from a list of responses, such as ‘They own 75% or more of the shares in the company.’)

Your articles of association

The articles of association is a document that defines the inner workings of the company and sets out the different responsibilities, liabilities and powers of the people involved – and more.

As part of the company registration application, you must choose whether you wish to form the company using the ‘model’ articles of association (these are appropriate for most limited company contractors), or if you would like to upload a bespoke version of these. This latter option is not usually recommended by us unless you have sought professional assistance in creating these articles).

Reviewing the information and submitting the application

Now it’s just a simple case of reviewing the information that you have provided, fixing any errors that you see, and then submitting the application to Companies House.

Companies House normally processes applications within 3-6 working hours, so it is possible to have your application accepted on the same day that it’s sent in!

So there you have it – how to register a limited company, a guide for contractors.

We hope you have found this step-by-step guide helpful, but if you need further information about forming a UK limited company, 1st Formations can help. Find out more here.