Due to the number of different ways to structure a company in the UK, it is important to receive good legal advice to help you choose the right structure as part of the planning process.
A good corporate lawyer will take you through each step of setting up a limited company including company formation, company registration and ensuring the correct structure and Articles of Association are chosen.
Have I formed the correct type of company?
The structure and type of company will often be dictated by the purpose of the business.
Correct company formation is key in the launch of a new corporate venture (whether it’s a new business or the incorporation of an already existing unincorporated business) and depending on the type of venture and the shareholding structure, it is possible to register a company limited by shares, a company limited by guarantee, a limited liability partnership or various other types of vehicle.
Your lawyer can take the confusion out of company registration, or incorporation as it is also known.
What is the best company formation for a new business?
Forming a company limited by shares is often the best fit for new businesses. Limited companies have shares which are owned by the controlling party or parties and there will be one or more directors.
Your lawyer can guide you in relation to the general structure of your company, including the adoption of different share classes, the drafting of a Shareholders’ Agreement to ensure that you know from the outset how your company will operate on a day-to-day basis, and the production of bespoke Articles of Association.
A company limited by guarantee
An alternative format which could be relevant is a company limited by guarantee. This form of the company does not have shares or shareholders. Instead, it has members who each promise to contribute a nominal sum in the event of winding up. This form of incorporation is especially relevant for clubs and societies, or social ventures such as community companies and charities.
A limited liability partnership
A limited liability partnership (LLP) may also be worth considering under advice from a Corporate Lawyer. An LLP is taxed as a partnership but in many respects is similar to a limited company.
If it is envisaged that the company may wish to offer shares to the public at some point, then the correct structure could be the public limited company as only PLCs can offer shares for sale to the general public.
Get in touch with Jackson Lees.
Our knowledge of Corporate and Commercial Law will ensure that sound advice on your business is never far away. Jackson Lees can help you avoid potential legal issues with a new business. We can also help you deal with any problems or Disputes as they occur. Call us on 0151 282 1700 to talk about your business.
Legal advice will ensure that incorporation runs smoothly and that business owners have the opportunity to consider the pros and cons of the variety of options available.
Contact our expert Commercial Law team today.