Online Business Incorporation - The Easy Way
May 4th, 2007 by 
Chris Pangburn
When launching your business there are a variety of legal entities that your business can take, and it is important to understand which one is right for you. The Business Link website contains a thorough outline of UK business structures, and provides useful tool to determine what legal business status is right for you. In the case of US businesses, a good description can be found here.
You may have been trading as ’sole proprietor’ or unincorporated partnership status for a while, but should things go belly up then you as the business owner would be personally liable for all business debts. I know this applies to the UK and am pretty sure that it’s the same over in the States, someone feel free to leave a comment and correct me if I’m wrong. I’m not trying to be pessimistic, but when your finances, savings and possibly home are at stake, you need to ensure that these are as ’safe as houses’ (excuse the pun) - you don’t want money coming out of your own pocket if things didn’t work out.
You can avoid this situation by incorporating your business into an Limited Liability Company (Ltd. or LLC). As the name suggests, when you’re incorporated you as an individual only have ‘limited liability’, unless you’ve signed a personal guarantee. These guarantees can sometimes be requested of you by banks or finance institutions before they will issue you with finance or loans. In such a situation, should your business ‘default’ on repayments then just as a sole trader, you would be personally liable according to the terms in the guarantee.
Traditionally, business incorporation has been undertaken offline by accountants and lawyers, however many ‘company formation agents’ are now appearing on the Internet which offer online business incorporation. This involves you completing their online forms to give them all the necessary information for the formation of your company, and then they use this information to create the necessary documents, and send your details to Companies House in the UK, or the IRS in the United States. Many of these formation agents charge extremely competitive fees for company registration - typically from £34 to £200. The exact amount depends on the options you choose, as you can choose to contract them for more services, such as mail forwarding or the provision of a registered office address for example.
I imagine that they offer a lot better value than having your company registered offline, as with everything on the Internet, there is a lot more price transparency and comparison available, so the prices will be more competitive. An example of the type of documents created by the company formation agents during online business incorporation are shown below:
- First directors and secretary and intended registered office (Form 10)
- Declaration on application for registration (Form 12)
- Memorandum of association
- Articles of association
- Register of members
- Register of directors and secretaries
- Register of directors’ interests
- Register of charges
- Share certificate/s (companies with a share capital only)
- Declaration/s of trust (where requested)
As you can see, the list of documents is quite extensive - personally I wouldn’t even try registering your company yourself unless you’ve got an accounting / legal degree! For as little as £34 it really is worth getting one of the online company formation agents to do the legwork for you, as all you need to do is type in the details they ask for, saving you having to hunt around to find out what details need to be submitted with what documents. The Company Wizard is one such formation agent, which you can find out more information by clicking the link below:
Company Formation - Form a limited company online from £34.99
Share This!
If the articles provided here have been valuable to you then please feel free to
say thanks with a donation to Chris Pangburn the author.
Related Small Biz Blog Posts
Posted in Business Legal Tips | 