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For obvious reasons company formation is a process worth taking time and thought over in order to make the choices that will be best suited to the future of your business.
The three main startup company types are:
1) – Private company limited by guarantee. The liability of each member is determined by the amount they agree to contribute to the country’s assets if it is wound up.
2) – Private unlimited company. Each member’s liability is unlimited.
3) - Private company limited by shares. In this case the liability of each member is determined by the amount of unpaid shares they have in the company.
The advantage of forming a limited company is that you will be better protected from personal responsibility even if your business gets into debt. This means you can feel secure about extending credit to increase profitable activity without taking as much of a gamble with your share holders’ personal finances. Instead of being liable on behalf of the business when it gets into trouble, you will only be responsible for any person shares you have in the company. There are also possible tax benefits for limited companies and banks are much more likely to lend money to limited companies thanks to the added security, however you will probably have to put up some kind of personal guarantee against the loan.
According to Companies House anyone can form a company, although if it is a public or unlimited company it must have a minimum of two subscribers. In order to form a company you must carry out a registration process, this can either be done directly by you or by a registration agent. These agents will be able to deal with all the nitty gritty of company formation such as collating details about the running of your business. There are also a number of readymade companies available from 3rd party companies and directly from Companies House, this can be a particularly good choice if you would prefer to have a company that is a few years old.
Before you begin the company formation process, make sure you have a valid application. If you wish to form a private company make sure you have at least one secretary. You also need to have at least one director. Public companies must have at least two directors, and a secretary that is formally qualified.
What to consider during company formation...
Company name – try to choose one that is timeless, professional, inoffensive – even in other languages and reflective of your business’s aspirations. It is also practical to choose a name that is easy to spell and pronounce.
Does your company have a web presence – These days it is important, if not vital, to have at least a small space on the web dedicated to your company. More often than not the internet is the stop for anyone looking for the details of a business, or a particular type of service. There are numerous web design and hosting companies out there, take time to choose one with a job-history that sounds appropriate to the needs of your new business.
Do you need a virtual office – This is the type of service that can be invaluable during the stages following company formation, it provides an assistant, not from your office but mimicking one that is. A virtual receptionist will take and deliver messages during busy periods and when staff members are out on a job.
Be aware that you will need to keep Companies House informed about developments within your company such as changes to the details of an officer or the resignation/appointment of a new one.
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