Company Formation

If you're looking for a UK Company Formation service we recommend using Simple Formations. Straight forward advice and no hidden fees.

Ready Made Shelf Companies

A question that is often asked is whether to buy a ready made shelf company or register a brand new company. For most people the answer is simple. If you need a limited company register a brand new company. This can be done through your accountant or online using an online company formation agent. Accountants also use these services or similar software to form their companies, but you may need their advice before starting your own company.

Shelf companies were very popular before online company formation became possible. It used to take several weeks to form a new company by post with Companies House. Therefore companies kept ready made companies ‘on the shelf’. However, this is now seen as a very dated way of getting a limited company. Shelf companies are old news!

Why would you buy a readymade company? There are really only a few circumstances where this may be necessary.

1. You like a particular company name and it is already registered by a formation agent.
2. You want a company that is a few months or years old.

There is a common misunderstanding that buying a ready made company is quicker than forming a new company. It is not.

A brand new company can be formed in 2-3 working hours. You provide all of your own details. Your chosen company name, your registered office, your director details, your shareholder details, your company secretary details (if required), you create the company with your own share structure as you want it.

Shelf companies require a lot of administration to change the company.

The name may need changing. You probably do not want your company to be called a RANDOM NAME LIMITED
You will need to resign the existing director and appoint a new one. This can be done electronically but it still takes time
You will not have the original shareholders recorded on the company Mem & Arts
The shares will need to be transferred to the new owner
If the share structure is incorrect, you may need to file forms 88(2) to issue more shares, and form 123, to increase the share capital.

This covers the basics. There may be other changes that are needed, but why create all of this extra work. Register a brand new company exactly as you want it.

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