How to incorporate a company without asking the Queen
The headquarters of the East India Company in London.
Incorporating a company used to be difficult. Once upon a time, you would have to ask the Queen if you could have a company. The first companies like the City of London Corporation (still in existence running the municipality of the City of London) and the East India Company (which lasted from the year 1600 to 1874 when it was finally dissolved) came into existence by Royal Charter as joint stock corporations at the pleasure of the then monarch.
ASIDE: The City of London Corporation — formerly the Corporation of London — has been in existence since at least 1067, though no formal grant of the first Royal Charter exists. The East India Company was granted its first Royal Charter by Queen Elizabeth 1 on 30 December 1600.
The modern Limited Company is relatively recent and has evolved through a succession of Companies Acts from the 1930s until the most recent version in the Companies Act 2006. The modern limited company is a simple, flexible vehicle with an enormous range of applications. The key features of the modern limited company are:
- liability is, by default, limited to the amount of money subscribed to the company by the investor;
- the company can issue a range of different shares with different rights and obligations relating to voting, dividends and capital in the company; and
- the limited liability company can own property, have debts and enter into contracts in its own right making it extremely transferrable and giving it the capacity to outlast its owner significantly.
The shareholding structure creates a sandwich dividing the owners of the business from the operators of it. Unlike a sole trading entity, the owners of the business can own the business and benefit for the economic rights to the assets and dividends of the company without having any day to day managerial responsibility in the company. The employees of the company can be paid and incentivised separately to the ownership of the company. This creates a huge degree of flexibility and makes the company a very powerful tool for the creation of wealth inside the UK economy.
Incorporating a UK Limited company has never been so easy. You can easily create a company using our online tool for £14.99 (which includes the £13 Companies House incorporation fee) and our suite of online company management tools make it easier than ever to incorporate and operate your company. The process takes 10 minutes to fill out the forms, and you can be trading through your company the same day.
Note, that you should be wary of carrying on any of your business activities before the company is incorporated. Doing so can risk liabilities accruing to you personally before and without an agreement with the third party, the liabilities won’t transfer directly to the company on incorporation.
If you have any questions about this, contact James on 0203 667 8738 or firstname.lastname@example.org for more information or use the comments section below.
Use our simple 5 step company incorporator to set up your company now in 15 minutes for just £1.99 including VAT.
Originally published at engollan.com on April 8, 2016.