What is Incorporation?

May 23, 2012

Incorporation is the process by which a new or existing business registers as a limited company. A company is a legal entity with a separate identity from those who own or run it. The vast majority of companies are limited liability companies where the liability of the members is limited by shares or by guarantee.

A business cannot operate as a limited company until it has been incorporated at Companies House under the Companies Act 2006. Establishing your business as a company means the directors are required to file certain documents every year such as annual accounts and an annual return. They must also inform Companies House about any changes, such as the appointment or resignation of directors or a change to the company's registered office.

Who can incorporate a company?

One or more persons can form a company for any lawful purpose by subscribing their names to a memorandum of association. In law, 'person' includes individuals, companies and other bodies. By completing the memorandum the subscribers are confirming their agreement to form a company. This is most often done now as an online process rather than individuals signing actual documents. There is no requirement that the persons forming a UK company have to UK nationals or to be resident in the UK.