Incorporating your Business

Incorporation is the process through which a new business is registered and gains the legal ability to carry out transactions in the united Kingdom. When an organisation is incorporate it becomes a legal entity separate from its founders or owners. Incorporation can lead to the formation of different types of companies including companies limited by shares, companies limited by liabilities as well as companies where member's liabilities are unlimited.

More information on company law advice

Incorporation of companies in the United Kingdom

This is governed by the Companies Act 2006. a company can be incorporated by one or more individuals governed by a memorandum of association. However, the people forming the company must all be above 16 years of age. The documents required to incorporate a company include the memorandum of association, the application to form a company, the articles of association and any other information required like an explanation in the case that the company name consists a sensitive word.

An incorporated business is expected to pay its own taxes, service its debt on time, adhere to rules and regulations under the company law in the United Kingdom and any other laws or statutes passed to govern their operations. In the case that the company changes its essentials such as the structure or the contents of the articles of association, the registrar must be notified of these changes such that at any given time, the records are a true representation of the company operations and structure.

Company Law in the UK

this is also referred to as corporate law in some cases and it is based both on statutes and common law. It governs the operations and interactions of businesses with different stakeholders including shareholders, debtors, employees, the government and other businesses in the ecosystem. There are legal practitioners who specialise in company law to guide businesses in day to day operations such that their operations are not only legal but also in a good standing with different stakeholders.

Company law can be sub dived into two broad categories- corporate finance that governs how the company raises different forms of capital and financing and corporate governance that governs the relationship between the company and other stakeholders.

Why companies should understand company law

in order to operate smoothly and to avoid confrontations with different stakeholders, the company must have in depth understanding of corporate governance and stakeholder management, both of which are covered by company law. This way, the company is able to avoid legal issues that could lead to legal suits or the company being wound up.

The company must also understand when to service different obligations and the best way to do it. For example, when to pay taxes, the rate of taxation and the best time to pay taxes. All this can be handled by a company lawyer. In addition, a company needs to have an individual or team that will advice on the best course of action in certain tricky situations in order to solve the issue amicably or take the bets legal action.

At the end of the day, companies are formed to improve the financial position of the owners or to impact the society positively. By having a team of lawyers with detailed understanding of company law, the company can concentrate on playing its mandate in the best way possible.