Who do I need to form my company?
Every private company must have at least one member and one director. Although private companies are not required, by law, to have a company secretary it can be helpful to appoint one. Traditionally this role is responsible for all of the administrative tasks and legal obligations in terms of returns and reporting.
What are articles of association?
Your articles of association set out how the company will be run, what powers the directors have and how shares will be managed. This can be as flexible or restrictive as you wish but unless you adopt your own articles you will default to the model articles put in place by Companies Act 2006. You should take legal advice on this as it establishes the foundation for your future business growth plan.
What are shareholders’ agreements?
A shareholders’ agreement is a legal document setting out what your strategy for managing shareholders will be, what will happen as it grows or requires funding, exit strategies and how shareholders can leave the business etc.
There is no legal requirement to have one but it is recommended. Once again you should take legal advice on this as it supports the foundation for business strategy.
We’re setting up a partnership… what agreement do we need?
Again, there is no legal requirement to have a formal partnership agreement but failing to have one increases the likelihood of disputes arising and makes them harder to resolve. It also avoids the less favourable consequences of the Partnership Act 1890.
As a minimum it should include information on how the business will be financed (including individual contributions), how profits will be shared, how decisions will be made, how disagreements will be resolved and what will happen should someone wish to leave the partnership. You could also consider including holiday entitlements, rules about employing family members, business strategy and procedures for considering additional partners.
Naming your business
It’s important that you select a name that is clear and distinct from other businesses’ names for a limited company. We can check this for you through Companies House.
You may wish, however, to trade under a different name (either a shortened version, your own name or the names of all partners, for example). You can do this but must make sure that the full name is disclosed on your business stationery, on your website and at your business premises.
Of course, it’s important when registering your name or choosing a trading name that you do not use anything that is intentionally misleading or confuses you with another organisation in the same line of business.
Some word choices may need to be justified before you will be allowed to use them. You can see a list of words that have to be justified, and how you justify them, at www.companieshouse. gov.uk (although the rules apply to all business names, not just the registered names of limited companies).
Sole traders (and ordinary partnerships) are prohibited from using the word ‘Limited’ (or Ltd) in their name.
Are there any other legal issues I need to consider?
- Do I need to do a health and safety assessment?
- Do I need a licence?
- Do I need employment contracts?
- Do I need a lease on a commercial property?
- Do I have terms and conditions of trade?
- Do I have intellectual property that I should protect?
- Should I register for VAT?
- Have I sorted out correct signage for my office?
Click here for help setting up your business or please contact either Marina Maclennan or Ciaran Keane on 0117 929 2811.