Forming a limited company nowadays could be quick, easy and inexpensive. If you don’t know how to form a limited liability company, there are online business start-up firms that can help you and they could set-up an LLC for you.
Before forming a company, you should know what kind of company you are going to set-up. There are two major types of companies, the limited or “Ltd.” and the unlimited company.
The unlimited company ties itself with the owner making them a single unit. If the company encounters financial problems and isn’t able to pay its obligations, the owners automatically shoulder the burden and their assets are used to pay for the said obligations.
The limited company, on the other hand, protects the owner’s assets. The company and the owners are considered to be two different entities. The shareholders have a limited liability which lies only to the capital that they have invested into the company. The limited liability ensures the safety and exclusion of the owner’s personal assets when the company is not able to pay its obligations.
The most important thing to consider is how much capital does the company need for setting up or how much share capital is required? It all depends on the type of company that you are building. Some companies don’t require any capital but some companies require as much as EUR 10,000. Some incorporators and start-up firms came up with different strategies that could help you form a company with no minimum capital requirement and use it in a state or country wherein there is a high capital requirement.
If you decide to hire an incorporator or an agent, you should first check its track record and credibility. It should be able to register your company in a matter of hours although some consideration should be given if you live in an area wherein documents could not be sent electronically to the Registrar. Some forming agents are tied-up with the Companies House in the UK and this could expedite the process.
The papers that are needed for the formation of your company depend on the county that you are in. Usually, there are two types of documents that are needed for the formation of your company, the Memorandum of Association and the Articles of Association. The Memorandum consists of an agreement wherein the initial shareholders agree to form a company and act as shareholders. The Articles of Association consists of the company’s by-laws to ensure proper management of the company. Your agent should discuss with you the important issues regarding your company like the preemption rights and voting rights before drafting the by-laws.
When you receive the Certificate of Incorporation from the Registrar, you can start doing business.
Forming a company can be fast and easy. Having a reliable agent to help you start your company is great and most of all, having a limited company gives you peace of mind while you are enjoying its advantages.
Jim F. Roberts has been expertly writing articles for 5 years on a variety of topics of interest. He finally discovered that starting a business requires a good knowledge on the types of company formations like solo ownership, Ltd., LLC, Limited Company and all the requirements in a business start-up.