Freelancers’ Questions: How do I go 'Ltd'?

Freelancer’s Question : I am an experienced copywriter about to make the jump into working for myself, after a decade working as a senior employee of a large company. I would like to set up a limited company, which I believe would be the best commercial structure, regardless of whether I stay as one-person operation or expand and hire people. However, some say forming a limited company is easy, while others say it’s not that straightforward in practice. So, how easy it nowadays to set up an ‘Ltd’?

Expert’s Answer: With respect to company formation, one can arrange for a limited company to be set up from scratch. Indeed, it is possible to wade through the formalities oneself by obtaining the necessary forms relating to the memorandum of association and the articles, from Companies House. However, for the sake of a few hundred pounds or so, the task can be undertaken by an accountant or solicitor.

Another method of forming a limited company, public or private, is simply to walk into a shop and buy one, much as one would purchase an “off the peg” suit. This can be done through any company formation agent and the process is instantaneous. Companies purchased in this manner are referred to as “shelf” or “ready made” companies. the articles of which are fairly all- embracing and hold, as it were, something for everyone.

In theory, it is possible to purchase a ‘shelf’ company on Monday and to trade with it on Tuesday. Whilst this is not necessarily true in practice, it does mean that one does not have to wait up to say six weeks or so in order to obtain approval and formal registration.

Drawbacks to "shelf" companies are most widely seen to centre on the name – which can be an odd sounding one, as often it is produced by a computer program. If not, the name may clearly reveal the company's ready-made origins. For example, names such as "Shelf Company 191 Ltd" or "Ready Made Company 191 Ltd" indicate that they are the one hundred and ninety first company in that particular series to have been registered.

Obviously, there is no reason whatsoever why the above named limited companies should not be proprietors of a trading style, as in "Shelf Company 191 Ltd" trading as "Smart Copywriters."


The expert was Sid Home, managing director of Safe Collections, a debt recovery and credit reporting agency.

Editors' note: Freelancers can also form a limited company through our own fast, online company formation service. If your chosen name is available, Companies House will usually send your Certificate of Incorporation within 3-4 working hours of submission, meaning you can start trading on receipt.


Feb 24, 2010
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