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Discover The Intricacies Of UK Company Formation
By: Dominic Donaldson

There are over 2 million limited liability companies in the UK making it of the most popular forms of company formation and the UK is one of the simplest and cheapest countries to form a company. Many entrepreneurs select limited liability companies for the obvious reason that it means that their personal assets are protected in the event of the company going into receivership, however as the company is private they maintain control of the company.

Public companies limited by shares must have a turnover of 50,000GBP to be floated and the potential is there to lose control of the company so as far as initial company formation is concerned, limited liability companies are the most popular. There are four pieces of documentation that are needed to form a limited company, these combines with a 20GBP fee, or 50GBP fee if you require same day incorporation can enable your company formation.

The four articles are the memorandum of association, the articles of association and the documents known as forms 10 and 12. This article gives an overview of these documents and their relevance to the company formation of a limited liability UK company. The memorandum of association is a document that states the company name, objects (objectives), registered office, liability and capital status.

The company name inclusion in the memorandum of association is a declaration that no other company is trading under that name in the UK and that no part of the name will cause offense, certain words might have to have written approval from the secretary of state. The object clause changed under the Companies Act of 2006 now means that a company no longer has to declare its object unless it is limited by its articles.

The registered office is simply the address that the company is registered to in the UK, it does not have to be the same as the trading address and it can be changes however every company formation requires a registered address. The capital section refers to the nominal capital of the company that can be issued in shares. As previously mentioned in publicly limited company formation there is a minimum nominal capital of 50,000GBP required however there is no minimum for privately limited companies.

The liability statement is part of company formation for the purpose of declaring that the company is limited, as you can form a privately unlimited company. The articles of association is a declaration of the structure of the company. After the Companies Act of 2006 the articles of association are now prescribed to companies, this is then paired with the memorandum of association to form the company constitution.

Form 10 is a declaration of the director of the company and under the 2006 act there is no requirement to have a secretary included in company formation under form 10. The declaration needs to include the director's name, address, date of birth however now a director no longer needs to include their home address. Previously a confidentiality order needed to be obtained however amendments were made in the 2006 act to render this unnecessary.

Form 12 is simply a declaration that all the requirements under the company act have been adhered to. After all these items have been submitted company formation can happen same day if a higher fee is paid.

Article Source: http://www.TheRichHead.com/articles

Dominic Donaldson is an expert on company formation and contributes to trade publications on the subject.

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