When choosing to set up a limited company, there are things that you should keep in mind. One of these things is whether or not you want to set up your company by guarantee. Many online agents offer first formation guarantees that can be somewhat beneficial to your business. There are a number of company formations agents, such as Rapid Formations, Companies Made Simple and Quality Company Formations who can help you in your quest to start a business.
If you do set up your limited company by guarantee, it must still be registered with Companies House, which is the Registrar of Companies in the UK. A limited company by guarantee is also required to have at least one director and it should have at least one guarantor. Both of these positions can be secured by the same individual or you can choose to have multiple directors and multiple guarantors, as long as you have at least one name for each of these roles. The information that you provide about your director or directors and any guarantors that are associated with your business become a matter of public record and are available for viewing by anyone who chooses to do so.
As a limited company, you must provide an official registered address when you are forming your company. This address will also be available as public record and you must provide the full postal address, which must be located in the country where the company will be registered. You are also required to provide SIC or Standard Industrial Classification codes, which explain what your business will be doing with regards to trading activities. You are permitted to have up to four different SIC codes. You need to provide information about PSCs or People with Significant Control over your business. This is typically a list of your directors and guarantors.
A Memorandum of Association and Articles of Association must also be completed when you are first applying for your limited company registration. The Memorandum of Association provides the name of all of your guarantors and outlines their agreement to set up your company and to become members of that company. The Articles of Association is the rules and regulations that must be adhered to within your company.
The limited company by guarantee is owned by the guarantors. These can be individual persons or corporate bodies. Guarantors are not shareholders. They do not own shares in the company and typically do not receive any of the profits that are made by the company. Guarantors agree to pay a specified amount of money, which is known as the guarantee, to help if the company incurs debts that cannot be paid by the profits. While guarantors are permitted to take a portion of the profits from the business for themselves, they normally do not. This is simply because guarantee companies are normally set up as a not for profit business, which means that the money that is generated by the company is kept for business purposes and activities. If your business is a for profit company, meaning that you look to make money from it, then a limited company by guarantee may simply not be the right choice for your formation.