Starting a Company

Starting a Company



Starting a Company

Companies in the U.K are governed by the Companies Act of 2006. There are different types of companies; those with limited liabilities and those with unlimited liabilities. Companies can be limited by guarantee or by share capital. There are also public and private companies. To set up a company in the U.K, there are several documents that need to be submitted to the registrar at Companies House. The required documents are: memorandum of association, articles of association and an application for registration.

The Memorandum of Association shows that the members have agreed to form a company and how many shares each person holds. Each member must authenticate the memorandum. The Articles of Association is a company’s constitutional documents that governs how and which business the company will conduct, the powers and rights of the directors and generally how the company will be run. The application for registration contains the proposed name, address and location of the company. It also shows the liability of the company and the proposed officers (The Company Act, 2006).

Once the registrar is satisfied that all the requirements have been fulfilled, he/she registers the company by either signing them or authenticating them with the official seal(The Company Act, 2006). The company is then issued with a certificate of incorporation. This authorized the company to start operating as a company. However, before the company starts trading, there are other requirements such as health and safety issues, environmental issues, licenses, employment and intellectual properties that have to be fulfilled.

The company may be required to obtain a trading license before it starts operating. This can be obtained from different departments of local authority depending on the business the company intends to undertake. For example, a company that undertakes health related activities should get a license from the local health authority. Environmental issues that may affect the company include its impact on the environment and regulations that affect its products and wastes. Tax regulations such as registering for V.A.T should also be considered as one cannot deal with V.A.T goods unless they are registered.

Employment regulations should be followed when dealing with employees. This includes the legal responsibilities of the company as an employer and the rights of the employees. These are governed by the Employment Right Act of 1996 and the Equality Act of 2010. The Employment Right Act gives guidelines on contracts, pay, dismissal and what action should be taken when they are not followed. The employer is supposed to give compensation to the employee for unfair dismissal. There are also regulations on pay that is due to the employees according to the working hours they work. According to the Employment Act, a week’s pay is the amount of remuneration for the average number of weekly normal working hours at the average hourly rate of remuneration. It also outlines the maximum amount of week’s pay which should not exceed £380.

The Equality Act of 2010 gives regulation about discrimination with regard to sex, age, disability, race, religion, sexual orientation among other characteristics. It ensures that employees are not discriminated against because of the above characteristics. According to the Act, in the case of disability, an employee should not be treated either less or more preferentially because of it. It is also against the law to discriminate an employee because of their race within the workplace. This includes giving someone less pay because of their race, a disability and sex. Pregnancy and maternity are also included in the characteristics that should not be used to discriminate an employee in the workplace.

Health and Safety regulations are also important for the company’s operations. The company has responsibility to its employees and the general public. It should have a health and safety policy that all employees are familiar with. The company should provide training to the employees and the right working environment that is safe for them. The Management of Health and Safety at Work Regulations of 1999 provides that the employer should conduct a risk assessment of the work place and implement measures to manage the risks found. The Health and Safety at Work Act of 1974 provides a framework for ensuring the health and safety of all employees in any work activity. The company should get authorization to ascertain that the health and safety standards have been fulfilled from the necessary authority.

Intellectual property rights play a very important role in the development and growth of the company (Intellectual Property Office, 2012). It provides competitive advantage to the company. The company should protect its designs, copyrights, inventions as well as the company’s name or logos. Intellectual property is protected by registering designs, trademark, copyright or patent. The company should also ensure it does not infringe the rights of other companies by using their intellectual properties without authorization.

In conclusion, the company should ensure it fulfill these requirements so as operate smoothly. The law provides regulations that protect both the company as well as the people the company deals with during it operations. This includes the employees and members of the public.


Companies Act 2006. Retrieved from

Employment Right Act 1996. Retrieved from

Equality Act 2010. Retrieved from

Intellectual Property Office. (2012). Intellectual Property Explained. Retrieved May 29, 2012, from

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