How many people do you need to register a new company?
A look at the required appointments to form a UK limited company
It sounds like a joke doesn’t it? How many people does it take to register a new company? Some people certainly think we’re joking when we tell them the answer… one. That’s right, you can form a UK company limited by shares with just one person. This person must then take on three roles within the company. Let’s take a look at these roles and the duties they entail.
Before we go any further, we should point out that whilst the minimum amount of people who can be involved in a company is one, there is no maximum.
Appointment Number 1 – Director
The director is the person/people tasked with the day-to-day running of the company. Some very specific responsibilities come with being a company director, with the GOV.UK site stating that a director should:
- try to make the company a success, using your skills, experience and judgment
- follow the company’s rules, shown in its articles of association
- make decisions for the benefit of the company, not yourself
- tell other shareholders if you might personally benefit from a transaction the company makes
- keep company records and report changes to Companies House and HM Revenue and Customs (HMRC)
- make sure the company’s accounts are a ‘true and fair view’ of the business’ finances
- file your accounts with Companies House and your Company Tax Return with HMRC
- pay Corporation Tax
- register for Self Assessment and send a personal Self Assessment tax return every year
Appointment Number 2 – Shareholder
The shareholder/s are the financial backers of the company (through the shares they hold) and ultimately own the company. The primary duty of shareholders is to exercise this ‘ownership’ power by voting at general meetings, therefore steering the direction of the company.
Appointment Number 3 – Person with significant control (PSC)
Whilst shareholders own the company, it’s possible for a previously ‘silent’ body to actually own the company (we know, that sounds ridiculous). This appointment was introduced by Companies House earlier in the year to increase transparency, enabling them to see who really owns a limited company. Still, in the overwhelming majority of companies a shareholder will also be the PSC.
According to GOV.UK, a PSC is anyone who:
- owns more than 25% of the company’s shares
- holds more than 25% of the company’s voting rights
- holds the right to appoint or remove the majority of directors
- has the right to, or actually exercises significant influence or control
- holds the right to exercise or actually exercises significant control over a trust or company that meets one of the first 4 conditions.
There are no actual duties aligned with this appointment.
When forming a company you will also have the opportunity to appoint a secretary. This is now an optional appointment, but just incase you do choose to appoint one, the role is traditionally associated with taking care of admin and filing tasks.
And that’s it, the three appointments required to form a limited company… which can all be filled by the same one person!
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