Starting a new company in the UK is easy until you meet a hurdle that requires legal action to fix. However, all this can easily be avoided by planning and registering the business the right way. It is even more critical to understand how to register a holding company in the UK since there may be slight differences from what you may be used to. First, a holding company refers to the parent or mother company with subsidiaries under its wings. This means that it is a larger company that holds the assets of the entire company unit.
Fortunately, it is still as easy to register it. The important thing is to understand the different details that may make the process slightly different. This article attempts to outline the steps one should follow when registering a holding company.
Also, check SEO ranking.
Start by Finding an Appropriate Name and Gathering all Documents
As you scour the internet to understand how to register a holding company in UK, it is not very different from other company registration. The only thing is that this type of company comes with several advantages, such as tax exemptions, favorable tax rates, and double tax treaties. So take your time to research the company name to pick a name that will be an asset and not a burden to you. When properly selected, a name can be the success of a business. Check to find out the rules that are used to govern name selection.
One of the most important rules is to ensure that the name is different from all others. Note that the company name is a legal identification, and any copying can be treated as a breach, thus attracting legal suits and penalties. On the same note, ensure that you have an excellent company office address to match the name. This will be used as a forwarding address in case of any official communications.
Standard Industrial Classification codes
This refers to the four-digit numerical codes that categorize the industries that companies belong to based on their business activities. Your company will certainly not deal with everything in the business world. It is essential to pick a niche that your company will be operating in. In most cases, companies tend to focus on particular industries. The SIC codes define the specific sectors the company is authorized to operate. This also helps place the company or business in the correct competitive position.
To find your company’s SIC code, first, visit the Company House web page. Next, go to the Find Company link on the page and type in the company name or registration number. Look through the list to find the code written against your company name or number. You can then use the search facility to find the exact type of business activities in this category.
Have Director and Shareholder Details
When registering your company, it is necessary to provide both director and shareholder details. This is a legal requirement that those opening a company should supply. Fortunately, you can choose to give one shareholder and one director the details during the company registration stage.
These details explain the shares of each shareholder and the mandate that each director has in the company. This way, possibilities of wrangles occurring are minimized.
Have the memorandum and articles of associations ready
For any business to operate as a registered company, it must have a memorandum of understanding and a copy of articles of association. These are legal documents that guide the operations of the company being registered. Usually, the two documents act as the organization’s constitution, guiding the procedures and decisions that relate to the business.
For instance, the memorandum of association is proof and certification that subscribers to the initial shares agree to the company’s formation and registration. It includes a standard set of clauses. This document is part of the registration process because it must be filled by the company house representative to signify the registration process is valid.
On the other hand, the articles of association are the book of rules that govern the company’s operations. It is what defines how the directors should run the company on behalf of the shareholders. In most cases, it also encompasses all the potential scenarios that could occur within the company. Both documents must be filed by the Companie House when registering your company. However, it is not always easy to come up with the article and memorandum of association.
Fortunately, some experts deal with both documents. Most of these professionals are seasoned lawyers who have an excellent grasp of the business world. Make sure you hire one if you are stranded or unsure of how to proceed.
Share Information with Shareholders and Define Sensitive Words in the Company using Supporting Documents.
Once the company’s registration is approved, you are obligated to share this information and any other progress regarding the company with shareholders. This means that you have to hold the first board meeting to brief all shareholders. It is best to discuss within the first few weeks of the company’s registration since this will ease the process. This first meeting is crucial as it defines a few things:
- Your shareholders will vote for the chairperson, company’s auditors, and bankers.
- Details on the company formation, its registered office, and the initial directors’ appointment are explained and confirmed at this meeting.
- Issues of human resources, payrolls, and all other details that could be of interest to the company are discussed at this meeting before scheduling the next one.
Once the meeting is done, conclude the process by setting up registers or essential documents. It would be best if you took care of books that the law requires you to. This includes the register of directors, register of directors residences and addresses, register of secretaries, register of members/shareholders, register of people with significant control, register of share transfers, register of allotment of shares, and the register of mortgages and charges. All these are defining documents that must be kept legally as required by law. It is vital to explain all this sensitive information to avoid any legal issues in the future.
Other tasks to do once the company has been registered
There’s a number of other important tasks you’ll want to consider once the company has been successfully registered, which might include:
- Setting up a bank account
- Registering with HMRC, which may include registering for VAT
- Registering and setting up PAYE for employees
- Setting up a website, particularly if you want customers to find you online
- If it’s important to your particular business, registering a trademark
If you’re looking to register a new company, we hope you find it a rewarding experience. Whether you’re starting your first company or are a company registration veteran, we’d love to hear any ideas and tips: contact us with details and we’ll look to share them with other readers.
Produce share certificates for the first shareholders
In the first board meeting, the directors will have authorized the issue of share certificates for the shareholders in the company. Although the Register of Members mentioned above is the essential evidence that someone is a shareholder in the company, the vast majority of companies still create and issue share certificates – and shareholders expect to receive them.
Elsewhere on our blog, you can read about the requirements for valid share certificates. You can also check out why so many companies are using Inform Direct to create and manage share certificates.
Set up company registers (and then maintain them)
The law requires each company to set up and then maintain company books, which include:
- Register of Directors
- Register of Directors’ Residential Addresses
- Register of Secretaries
- Register of Members (otherwise known as Register of Shareholders)
- Register of People with Significant Control
- Register of Allotments of Shares
- Register of Share Transfers
- Register of Mortgages & Charges
You can buy template paper registers to fill in by hand. Better still, straightforward online products like Inform Direct will automatically update electronic statutory registers whenever you made changes to the company, its officers, and shareholders.
Wait for the company formation to be approved
You can’t start to operate the business as a limited company until you receive approval from Companies House, which will undertake some checks of the information you’ve submitted. Thankfully, if you file online, approval of your new company is quite quick – using Inform Direct, where we do a lot of the necessary checking before even submitting the incorporation to Companies House, we’ve had new company registrations accepted in as little as 6 minutes.
If you register a new company using paper forms, the process of approval will take longer.
Hold the company’s first board meeting
Once you have Companies House approval of your new company, you’ll need to hold a meeting of the directors to cover some of the necessary formalities. It’s best to do this within a few weeks of registering the company and to make this as easy as possible, we’ve put together a guide to what needs to be covered and template minutes of the first directors’ meeting.
Registering a holding company in the UK comes with a lot of advantages. However, it would help if you were sure of all the details required before starting the process. If you have registered a company before then, this will not be a significant issue. Nonetheless, ensure that you get it right from the beginning to avoid making costly mistakes.