What is a Certificate of Incorporation?
When forming a new business in the UK, you'll be required to register your company with the Companies House (an official body responsible for registering businesses within the UK). Once this is done, a certificate of incorporation will be issued back to you.
Of utmost importance is a certificate of incorporation to your business because it legally shows proof that your business has been formed and fully prepared to operate within the UK. That being said, you must understand what the certificate of incorporation is, what is contained in it, how you can apply to get one, where and when you'll need it in your business enterprise, and many more.
Obtaining a certificate of incorporation is quite easy to do. However, you need to follow the right steps while doing so. Now, let’s dive in.
What is a Certificate of Incorporation?
A certificate of incorporation is a legal document that confirms that a business or company has been duly registered with the company house. This document shows that a company exists as a distinct legal entity separate from its directors or shareholders.
It is issued by the Companies House in the UK upon the approval of the application for the formation of a new company. Thus every new company that has been registered according to the Companies Act is been issued a Certificate of Incorporation.
We can simply put that it is also a company's birth certificate since it authorizes the birth of a new company. It contains some key information about your company and it is vital in running some business transactions like opening a business bank account and many more.
What Information is in a Certificate of Incorporation
The Certificate of Incorporation provides important information about your company. Below is the information contained in it.
- Company's official Name
- Company’s Registration Number
- The Type of Company (private or public, limited or unlimited, limited by shares, etc.)
- Where the Company is registered (England, Scotland, Wales, Ireland).
- Office Address of your Company
- Date of Company’s Incorporation
- Issuing Registrar name (Edinburgh, Belfast, or Cardiff).
- The legislation in which the Company was formed (e.g. Companies Act 2006).
- Official Seal of the Companies House
- Royal Coat of Arms
How to Apply for a Certificate of Incorporation
Now that you understand what a certificate of incorporation is and the information contained in it, you might be wondering how you can apply to get one. The below steps simplify how you can get this crucial document.
- Decide on a Company name
Firstly, you would need to decide on your company’s name. This is a vital step because it determines to a large extent if your application will be approved or rejected. You would need to be sure if your chosen name hasn’t been used by a preceding company before. Apart from that, you should make sure that the name is not offensive, sensitive, or connected with the government or any authority. These and many more are the rules for naming a company as provided by the Companies House and you should be sure you aren’t omitting any.
- Decide on your Company's office address
You would also want to decide on the company’s office address. This address will be requested when completing your application online and it will also serve as a point of contact whenever the Companies House needs to send a document.
- Gather the necessary information
Apart from your company name, you would be required to provide information about the founders, directors, and shareholders of the company, and your SIC (Standard Industrial Classification) code. You would need their full name, date of birth, address, nationality, and so on. Also, you would need to determine and provide a statement of the capital along with your application
- Make your Application through the Companies House
Once you have gathered this information, you can proceed to make your application. You can either make your application online or by post through the Companies House. You can complete the application online by providing the information gathered above. Once you have completed and submitted the application, you will be sent your Certificate of Incorporation within 1 or 2 days. However, if you make a postal application, it could take longer days.
- Be sure you have Complied with the Company Act 2006.
While completing your certificate of incorporation application, you would be required to re-affirm that you have duly complied with the Companies Act 2006. To that effect, you will be required to confirm a statement indicating that you are in full compliance with the Company Act.
- Pay your Fee and Wait for Approval
Once you are done with the above, go through your application properly to ensure that there are no errors or mistakes.
You’ll be required to pay £12, however, if you prefer to receive it by post, you would pay a sum of £40. If you have provided the required information correctly, you’ll receive the certificate of incorporation within a few days indicating that your application was approved and your company has been registered.
Digital and Paper Certificate of Incorporation
You can either receive a soft copy or a paper copy of your certificate. If you complete your application online, then a soft copy will be sent to your email within 1 or 2 business days after your application.
However, if you complete a paper application, then you should expect a processing timeframe of 8-10 days before the certificate is sent to your registered company’s address.
How to Get a Replacement if the original Certificate of Incorporation is misplaced
If you misplace your certificate of incorporation, try and log in to the email account you used in registering the company, if it's still not found, then you would want to visit the Companies House website to download another one. To do that, go through these steps:
- Visit the Companies House website
- Input your company name in the search space.
- Your company name should pop out, click on it.
- Then select filing history.
- Scroll down to the down part of the page.
- You'll see the View PDF option. Select it to download or print your certificate of incorporation.
When Do I need the Certificate of Incorporation?
Although you may not always need to use your certification of incorporation, there are important instances when you might need to present it. For example, when opening a business bank account in the UK, you would be required to produce a copy.
Other instances when you might need to show the certificate include:
- Getting into a business contract with another company
- Applying for a business loan from banks
- Requesting permits and licenses for your business and many more.
- Changing your business name
- Filing for tax payment
- Buying landed and home properties for your business
- Opening branches for your business outside of the UK
- Restructuring your business
- Seeking business funding from investors and other sources.
Apart from all these practical uses, your certification of incorporation legally symbolizes that the government recognizes your business. That alone gives more respect and credibility to your business which in turn brings more development to the company.
Do I need a New Certificate of Incorporation if I change my Company Name?
Yes, you need a new Certificate of Incorporation if you change your company name. You’ll only need to apply to the Company House and it will be updated. However, when doing this, ensure that the new name hasn’t been used by another company and it complies with the UK Company House naming rules.
Once you have the new name ready and you’ve made your application by completing the form NM01 on the Companies House website, a new Certificate of Incorporation will be issued to you. This new certificate will contain the same information as the old one apart from the new company name. Your company registration number, incorporation date, and other information will remain the same.
You are expected to keep both the original and the new certificate intact and safe in case there is a need for them in the future.
Importance of Obtaining a Certificate of Incorporation
Incorporating your company is crucial and it helps in several aspects of the business. Here are the crucial reasons why you should obtain a Certificate of Incorporation.
Protects you from Liability: When you obtain a certificate of incorporation, your business is treated as a separate legal entity. Thus any form of liability incurred by the company is distinct to the company. If a company is unincorporated, then the personal assets including the personal bank savings and the landed properties of the owners or shareholders are at risk if the business incurs debt.
Promotes Company’s Existence and Transfer of Ownership: Once you incorporate your company, the death or retirement of any of its owners or directors doesn’t stop the business from existing and running. It is formed according to the Companies Act and can only be terminated by law. Also for an unincorporated business, it is usually difficult to transfer ownership since there are no legal bindings to the owner or owners of the business right from conception.
Encourages business growth: A certificate of Incorporation enhances your company’s positive image. It shows how credible your business is and this helps develop trust from the public, lenders, investors, and many more. When the public trusts your company, the chances of them buying your service or product increases. Also, investors and lenders would be willing to deal more with you once they trust your business.
Enhances ability to manage: With a Certificate of Incorporation, every director or owner understands his or her duties and responsibilities. The board of directors also easily delegates duties to other members of the company. When a company is unincorporated, delegation of duties and the decision-making process could be tougher as there are no legal bindings to the share of power.
Improve Company’s Status: After getting the company certificate of incorporation, your company has the right to sue other personal or business entities and other entities can also sue your own company distinctly on its own name.
Where Do I Keep My Certificate of Incorporation?
Certificate of Incorporation is an important document to your business and so it must be kept in a very safe place. You could make copies to be kept at secured places including your registered office address. Also. You can also have some softcopy kept safe and backed up in some digital storage device. Banks, investors, and other business personnel would most times need the digital copy so you should have it readily accessible but safe.
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Frequently Asked Questions
Why do I need a Certificate of Incorporation?
You need a Certificate of Incorporation to start and operate as a business in the UK. Without this document, you can’t form a limited company and thus can’t operate as one.
How long does it take to get my Certificate of Incorporation?
If you make your application online, you should receive it within 1 or 2 business working days. However, if you apply through mail or post, it could take 8 to 10 days before you receive it.
How much do I have to pay to file for a certificate of Incorporation?
Typically it’ll cost you £12 online and £40 through post to file for a Certificate of Incorporation.
Can I apply for my Certification of Incorporation Online?
Yes, you can apply and receive your certification of incorporation online. You’ll make your application through the UK Companies House (the official government agency responsible for registering new companies and issuing the certificate of incorporation in the UK). However, you’ll be required to pay a fee and also comply with some rules and regulations.
Conclusion
The importance of a certificate of incorporation to your business cannot be overemphasized. While making other preparations to start your new business, be ready to get this vital document. Applying to get your certificate of incorporation in the UK is quite straightforward, however, you should not miss out on any of the necessary steps and points explained above. Do you want help registering a company in the UK while abroad? Incorpuk is here to help you register a company today. Contact us now and enjoy diverse perks.