• Private limited companies - can have one or more members e.g. shareholders. They cannot offer shares to the public e.g. on the stock exchange.
• Public limited companies (PLC's) - must have at least two shareholders and can offer shares to the public. A PLC must have issued shares to a value of at least £50,000, before it can trade. View the guide to company formation at the Companies House website .
• Private unlimited companies - these are rare and usually created for specific reasons. Legal advice is recommended before creating one

Setting up a Limited Company
A Limited company must be registered (incorporated) at Companies House. It must have at least one director (two if it's a PLC) and a company secretary, who may also be shareholders. A director or board of directors make the management decisions. Finance comes from shareholders, borrowing and retained profits. Public limited companies can raise money by selling shares on the stock market, but private limited companies cannot.

If you want to trade as a private limited company, there are three things you need; payment to the registration body Companies House, a company name and a UK address. This is the address of your registered office - somewhere to keep official documentation, to receive official correspondence and where court documents can be served.

Part of the registration process involves stating the nature of your new company. This is done in a Memorandum and Articles of Association, sets of which can be prepared by our lawyer. For more details on the Memorandum and Articles of Association, click here

There are several methods of setting up a company. The first is to deal directly with Companies House. This is the cheapest option and Companies House Staff can give guidance on general matters such as filling in forms or Company Names. You can check for valid company names by using Companies House Webcheck by clicking here.

To find out whether your chosen trade name has already been registered as a trade mark, you can look on the Patent Office Website by clicking here.

However, registration can be time-consuming, especially if you make a mistake, and Companies House staff will not advise you about specific matters such as the content of the Memorandum and Articles of Association. You should seek the assistance of a company formations service, solicitor or your accountant to help you form your new company for a fee.

Alternatively, you could also get assistance from an online registration company as Companies House now accepts applications electronically. Since this generally requires some documentation to be posted, registration takes three to eight days. However, many Company formation services also provide same day online processing.

Finally, you can buy an 'off the shelf' or readymade company. You simply transfer your name to an available one. The process can be completed on the same day but the choice of names may be limited.

Financial Records
Accounts are filed with Companies House. A "shuttle" annual return (form 363s) will be sent before the anniversary of incorporation each year. It needs checking, amending and returning to Companies House with the appropriate fee. The directors and secretary are responsible for notifying Companies House of changes in the structure and management of the business.