Founding a company means launching or starting a business with the intention of making revenue. This could be on your own or with a co-founder(s).
Ideally, it would be advantageous to found your company legally by incorporating it. Incorporation is a legal means of forming a new business. The incorporated business exists as a legal entity in its own right separate from yourself.
Depending on where you live there are numerous advantages to an incorporated company.
Limited liability of the founders is one advantage. What this means is as a founder, if your company were to go under there would be limited repercussions towards you as an individual, as it is the company and not yourself that has folded.
The ‘corporate veil’ is another. By incorporating and forming a legal entity you are shielding yourself personally from lawsuits and other claims as it would be the company and not yourself that would be sued.
Incorporating your business makes it easier for investors to invest in your business and get allocated a share.
In the UK, there are several types of incorporated entities the main one for start-ups being the Limited Company or Ltd.
In the USA you have the LLC or C Corp.
Forming a company in the UK is relatively simple and can be done easily online.
Pop Up World provides easy company formation for start-ups.
The steps to founding a company are relatively simple but it’s important to give them some thought.
- Think of a unique name. In order to incorporate your new company, you need to think of a unique name that has not already been registered.
- Incorporate your company and register all the founders with an agent or incorporating body in your jurisdiction.
- Register your new company for tax and other business requirements such as corporation tax, data protection licences, business permits etc.
- Open a bank account. Give your new registration details to a bank to open a business bank account.
- Start Trading. Once you have a bank account you can start trading, hire staff, Raise Capital etc.
- Obligations. Remember that founding a company comes with legal obligations such as filing accounts or annual meetings.
For more information on founding your company check out the Business Zero To Superhero Start up Guide.
Hope this helps!