The appointments required to create a limited company

A look at the roles of directors, shareholders and people with significant control

GOLD TRUSTED MERCHANT

Anyone of any nationality can start a UK limited company as long as they’re over 16 years of age and haven’t been disqualified from becoming a company director. Here you will find everything you need to know about the appointments that are required to create your own limited company, and the roles these appointments entail.

First up, let’s answer a common question… How many people do you need to start a limited company?

One. A UK company limited by shares can be formed with just one person (with no maximum on the amount of people involved). If you are starting a limited company on your own, you will need to fill all of the below roles yourself. Corporate appointments - other companies taking up roles - are allowed but your company must have at least one person in the director role.

Let’s take a look at the appointments:

Director

This is the person or people who are in charge of the running of the limited company. According to the government, as a company director you 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

Shareholder

The actual owner/s of the company. As shareholder you are responsible for guiding the company and you do this by voting at general meetings. It’s worth noting that the initial shareholders of the company are known as ‘Subscribers’ - no extra duties come with this, it’s simply to highlight that they were shareholders at incorporation.

Person with significant control (PSC)

PSCs were introduced in April 2016 to increase transparency in limited companies because, whilst shareholders own companies, there was nothing in place to stop an unnamed person or company from actually owning the company. The government state that 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 duties aligned with PSCs.

Secretary

This has been an optional appointment since April 2008. However, just in case you do wish to appoint a secretary, the duties were traditionally associated with ensuring office admin duties were taken care of.

There you have it, the appointments you need to make to create a limited company.

Interested in finding out more? We’ve written an eBook that covers all the information you need to create a limited company; ‘Everything you need to form a limited company’.

Download the eBook now

Brought to you by Company Formation MadeSimple, the UK’s leading online company formation provider. Established in 2002, we have helped more than 500,000 people get their company started. Are you next?

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