How The Incorporation Of A Company Plays Out

by Business Published on: 09 February 2023 Last Updated on: 11 March 2023

Incorporation Of A Company

It isn’t compulsory to incorporate a company before you start selling goods and services. However, it is advisable because it gives you limited liability protection and makes it easier to sort out taxes among other benefits. This article will guide you through the process of incorporating a company in the U.K.

Incorporation Of A Company: Meaning

Incorporation refers to the formal and legal process of setting up a corporate entity. It could be a business, local club, non-profit organization, etc. It doesn’t have to be a new organization, as you can also register old ones that have existed for some time. Incorporating your organization recognizes it as a separate legal entity and gives you limited liability in case anything goes wrong.

What Laws Do You Need To Know

You must be at least 16 years old to register a business in the United Kingdom. The name of the firm must not be one already taken by another business or similar to an established brand. There are four ways to register a business in the U.K.:

  • Private company limited by shares: Capital is contributed by owners in the form of shares. The shares of this type of firm cannot be sold to the public.
  • Private company limited by guarantee: Owners secure the firm by guarantee instead of shares. The amount of guaranteed shares is determined by the shareholders.
  • Private unlimited company: Shareholders have unlimited liability but can provide limited liability capital to their business.
  • Public limited company: Capital is provided by the shareholders. Company shares can be sold to the public and traded on a stock exchange.

Incorporation Of Company: Procedure

1. Documentation

You must complete a form IN01 to register your firm. This form requests the following information:

  • Business name;
  • The physical location of the business;
  • Registered office address (can be different from the physical location above but must be in the same country);
  • Description of business activities;
  • Indication of the type of structure (private, public, or unlimited);
  • Proof of capital, guarantee, or company shares;
  • Details about the director(s) and secretary if it is a public firm;
  • Elected articles of association.

2. Registration Fee

You will need to pay a fee when you submit your application. The fees depend on how you submit it:

  • Web filing: £12.
  • Electronic Software Filing: £10 or £30 for same-day service.
  • Paper filing: £40 or £20 if the firm is Welsh.

3. Memorandum Of Association And Articles Of Association

documents to submit together with your application

These are two important documents to submit together with your application.

Memorandum Of Association

A memorandum of association is a legal statement signed by all the owners or guarantors declaring their intention to form a business. If the firm is secured by shares, you must submit proof that all listed owners have at least one share in it.

Articles Of Association

This refers to the written rules about running the firm as agreed by the shareholders. It is mandatory to set these rules, which must be compliant with U.K. law. They contain information about the division of shares among the owners alongside other things.

4. Certificate Of Incorporation

Certificate Of Incorporation

After submitting all the proper documents in compliance with U.K. law, you will collect your certificate of incorporation. This document certifies that you have fulfilled the legal requirements and that your firm is now formally registered in the U.K. It includes the following information:

  • Business Name;
  • Date of incorporation;
  • Indication of the type of company;
  • Registered office address;
  • Benefits of incorporation.

Drawbacks Of Incorporation

Registering your business has many benefits but also some drawbacks. It takes more effort to manage an incorporated business than a non-incorporated one. In most cases, you may need to spend a significant sum on hiring an accountant. As a registered business owner, you are also required to prepare annual financial accounts.


We have broken down how incorporating a company works and the steps to follow if you want to do it. It shouldn’t be difficult to register your firm, but if you find it difficult, you can enlist the help of a platform like Osome.

Author Bio: Abdul Aziz Mondol is a professional blogger who is having a colossal interest in writing blogs and other jones of calligraphies. In terms of his professional commitments, he loves to share content related to business, finance, technology, and the gaming niche.

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