What is a Scottish Limited Company? A guide to forming a Scottish Limited Company

A Scottish company is a company that was incorporated at the Companies House in Edinburgh and has a registered office address in Scotland in the UK. You can also create an English and Welsh company by incorporating a company at Companies House in Cardiff in the UK and the registered office address of the company must be located in England and Wales in the UK;

This applies to all the jurisdictions of the UK. In all three jurisdictions of the UK if a company is incorporated in one of them and has a registered office address in that jurisdiction, then the company is of that particular jurisdiction of the UK.

Although all UK companies are incorporated under the Companies Act of 2006, there are different (three) different legal systems available in the UK and this is based on the particular jurisdiction where the company was created. Since these various jurisdictions have different legal systems, the company is subjected to the legislation of the particular jurisdiction it was incorporated in and has a registered office address. For example, if a company is incorporated in Scotland, the company must abide by the general legislation of the Companies Act 2006 and also the specific legislations of Scotland.

How To Incorporate a Scottish Company

Registering a company in the UK has become less stressful since the introduction of the electronic complication formation method. Within a few hours, you can also register a company in the UK. After incorporating your company, you can start trading right away.

Before going ahead to register a company, there are a few things you need to take into consideration:

1. Company Structure

Depending on the nature of the company and its activities, you can choose the kind of company structure you want. There are two types of company structures for private limited companies; limited by shares and limited by guarantee.

1. Limited by Shares: In a limited-by-share company, shares are issued before and after incorporation and the members are referred to as shareholders. This is majorly a profit company with the sole aim of making profits. Here, the shareholders receive dividends as profits for their shares and the shareholders own the company.

However, the owner of the company can decide to be the sole shareholder of the company and in this case, they own 100% of the company and therefore have full ownership[ of the company

2. Limited by Guarantee: In this case, the company doesn't issue shares in any form and the company is more of a non-profit company. Here the members are referred to as guarantors opposing the shareholders of the limited-by-shares company. Here, instead of shares, the guarantors have a guarantee in the company and the guarantors are not entitled to any form of profit or benefit from the company as opposed to dividends paid to shareholders.

2. Business Activity

You have to also decide the business activity of your company is very important. You have to know if your company will have a single business activity or multiple business activities. Your business activity must contain every activity that your company plans to carry out. You can also choose to include industries your company would like to venture into in the subsequent years of operation.

3. Business Plan

A business plan, though not mandatory, is very important when starting a business. The business plan is more of a guide to the business before and during its operation. A business plan contains various parts. These parts include

1. Budget: this is to contain the budget that is expected to run the business. Before crafting a budget, you must have carried out a lot of research about the business and make sure your budget can run the business without going out of budget during the creation of the business. A budget is very important for every business as it gives the business owner an insight into the cost needed to start a particular business.
2. Business ideas and goals: in every aspect of life, goals are very important for focus. A typical business plan must contain the business idea, what you need to do during business and how to run your business as the business owner. The business idea is to help you navigate during creation and know exactly how to go with the preparation for your upcoming business. The goals of the business can be made for a year or more. It should contain what the business is expected to have and gain at the end of the designated period. It should contain the financial goal and also the percentage of growth expected after that time. For example, if the goal is for three years, your business plan should state the expected profit from the business in three years and it must also contain the expected loss in that period.
3. Running Cost: unlike the budget, the running cost of a business is the cost needed to run the business after the start-up. This cost does not include the budget of the business.
4. Business Activity: as mentioned earlier, it is the activities that the business will take on during its operation.
5. Target Audience: this is the audience you are selling your products or services to. You must research to know your target audience as it is very important during the marketing and advertisement of your products. You must market your products to match the preferences of your target audience without having to trigger any negative response.
6. Market Analysis: a market analysis is important to know the behaviour of the market and the target audience to know how to do your marketing and advertising. It also helps you to know the market fluctuations of your products and to know if your products are seasonal or not.
7. Marketing Strategy: This should include how you plan to attract your customers and what form of marketing you will carry out to attract your clients. This should also include if your company will run discount sales or bonus sales to attract customers.
8. Pricing: the pricing of your products is very important. You price your products not to lose but to make profits and study your competitor's price to determine the price that best suits your business.
9. Management: it should include how the management structure of the business should look like. It should also include the structures ranging from managers down to the employees of the business.

Steps To Create a Scottish Company

To incorporate a Scottish company, you must fill out the Companies House company registration application form (Form IN01) either electronically or by post submission to Companies House in Edinburgh. To fill out Form IN01, you need the following information:

1. Company name
2. Registered office address in Scotland
3. Directors details
4. Shareholders details (for companies listed by shares), or Guarantors (for companies listed by guarantee)
5. Share capital and this only applies to a company limited by shares
6. Persons with significant control (PSCs) details

1. Company Name

This is a very important part of any business. The name is the identity of the business and should be able to attract customers to the business. When naming the company, you have to take the following into consideration

• The name must be unique, and must not be a name or lookalike of any registered company in the UK because the registration will not be accepted
• The name must not be an offensive word when translated into other languages the name must not be a name relating to a crime or can provoke your audience
• The name should preferably have a hint of the business activities of the business or related to the industry of your company

2. Registered Office Address

During application, the registered office address of the company will be requested by Companies House and it must be provided. The address must be Scottish and must be a postal address and not a PO box. You can choose any address of your choice as long as it falls under the above considerations.

You can also choose to use your residential address as your registered office address, but this is not advisable. It is not advisable because the address of the company is put on public

3. Directors

The directors are very important members of the company and they serve as representatives of the company to the government and other authorities. You can have more than one director and as long as the person is 16 years or above, they qualify to be a director of the company.

The director is responsible for filing all accounts of the company to Companies House and HMRC. The information of directors include

• Name
• Residential address
• Date of birth
• Occupation
• Service address

This information goes the same for shareholders and persons with significant control of the company except for the addition of the percentage of shares or ownership they own.

4. Service Address

When individuals take on roles as directors, members, or PSCs (People with Significant Control) within a company, they are mandated to furnish a service address. This service address serves as the designated location for all official correspondences from entities such as Companies House, HMRC, and certain other governmental bodies. It's imperative to understand that the location of your service address is not confined to Scotland; rather, it can be situated anywhere. You have the flexibility to opt for our London Service Address during the application phase, or you may select any other convenient address within the UK or even abroad that aligns with your preferences and requirements.

Incorporate Your Company with Incorpuk Today

At Incorpuk, we will help you file accurate information when you register your company through us. We will help you with incorporation articles, a registered office address, and all you may need to register your company in the UK. Contact our team if you seek any information; we will gladly assist.

Conclusion

Once you have successfully submitted this information in the form IN01, then you will wait for a confirmation from Companies House and your company has been created.

Incorporating a company in Scotland is almost the same for every part of the UK except that some of these countries have unique laws guiding companies. Using the electronic method is easy and within hours, you can have your company registration successful. If you have any questions on how to form a Scottish limited company, don’t hesitate to contact us here, and we’ll do everything we can to help.