Companies House Setup for Children's Homes: SIC Codes, PSCs, and Matching the SC1 Application
Children's Homes (England) Regulations 2015 specialists · Updated 18 April 2026
At a Glance
Children's homes register with Companies House under SIC code 87900 (Other residential care activities n.e.c.), and the company details — name, registration number, registered office, directors, and Persons of Significant Control — must match the SC1 application character-for-character under Regulations 5, 32, and 33 of the Children's Homes (England) Regulations 2015. Online incorporation takes around 24 hours for a £50 fee, but Ofsted scrutinises every PSC holding more than 25% ownership against the Fit Person standard, so the homework on shareholders, directors, and articles of association must be complete before you incorporate — not after. Company-name mismatches and undisclosed PSCs are two of the most common, and most avoidable, reasons Ofsted returns children's home applications.
Practical guide to setting up a children's home at Companies House — correct SIC code, Persons of Significant Control, articles of association, and keeping your corporate record perfectly aligned with the SC1 application.
Published 18 April 2026
Key Facts
- The correct SIC code for a children's home is 87900 — Other residential care activities n.e.c.
- Online Companies House incorporation is £50 and typically completes within 24 hours
- Company details on Companies House must match the SC1 application character-for-character
- PSCs holding more than 25% of shares or voting rights must be filed at Companies House and are candidates for the Ofsted Fit Person assessment
- Changes to Companies House records must be filed within 14 days
- Company-name mismatches with SC1 are one of the three most common reasons Ofsted returns applications
Do you need a limited company to register a children's home?
Ofsted does not require a children's home to be operated through a limited company specifically, but in practice the vast majority are. Ofsted registers the "registered provider" under Regulation 5 of the Children's Homes (England) Regulations 2015, and that provider can be an individual (sole trader), a partnership, a limited liability partnership, a limited company, or a charitable organisation. What matters in law is that the provider is a Fit Person under Regulation 33 and that the legal entity can hold the liabilities and compliance responsibilities that registration imposes. A private limited company is the default in the sector for three reasons. Limited liability shields directors' personal assets from operational risks that in residential childcare can be significant. Insurers routinely underwrite corporate entities more readily than sole traders in this space, and placement-indemnity premiums are often materially lower. Commissioning local authorities typically require providers to be incorporated before placement contracts are signed, so sole-trader registration is legally possible but commercially narrow. Charitable trusts and community interest companies (CICs) also register children's homes and carry specific advantages around grant funding and local-authority preference. The structural choice should be made before incorporation — changing the operating legal structure after Ofsted registration typically requires a fresh application rather than a variation.
A children's home's registered provider under Regulation 5 of the Children's Homes (England) Regulations 2015 can be an individual, partnership, limited liability partnership, limited company, or charitable organisation — but a private limited company is the default structure in the sector because limited liability, commercial insurability, and local-authority commissioning all favour it.
Which SIC code applies to children's homes?
The correct UK Standard Industrial Classification (SIC) code for a children's home is 87900 — Other residential care activities n.e.c. This is the code you enter on form IN01 or the online incorporation form when you set the company up. Using 87900 signals to Companies House, HMRC, lenders, and insurers that the company operates a residential care setting for a population other than the elderly, disabled, or those with learning disabilities or mental-health needs — which is where children's homes sit in the taxonomy. Homes whose primary care focus is children with learning disabilities, mental-health conditions, or substance misuse may alternatively use SIC 87200 (Residential care activities for learning difficulties, mental health and substance abuse), but in practice 87900 is the safe default for a general children's home. What you must not use is any 88xxx code: those cover day care and social work without accommodation, and a home that provides overnight residential care classified under a day-care SIC will trip flags with insurers, local-authority finance teams, and Ofsted registration cross-checks. You can register up to four SIC codes on your Companies House record, and an operator might sensibly add 85600 (Educational support services) if the home provides in-house education or an ancillary code for support services — but the first-listed SIC should always be the residential care code.
Children's homes register at Companies House under SIC 87900 — Other residential care activities n.e.c. — because the home provides overnight accommodation; SIC 88xxx codes cover day care and social work without accommodation and are the wrong classification for a residential setting.
Choosing a company name that won't conflict with Ofsted
Ofsted does not approve company names, but it does compare the company name on your Companies House record against the provider name on your SC1 application. A mismatch — however minor — is one of the most common reasons Ofsted returns an application for correction. If you have incorporated as "Sunrise Care Homes Ltd" and your SC1 says "Sunrise Children's Home Ltd", that inconsistency will cost you weeks. Beyond matching, the name itself should be sector-credible and avoid restricted and sensitive words. Under the Companies Act 2006, using words like "charity", "foundation", "institute", "association", and "trust" in a company name usually requires supporting evidence — Charity Commission registration for "charity", for instance. Words like "care", "residential", "children's", and "support" are permitted without additional paperwork. Avoid geographic monopoly claims such as "North West Children's Care" that imply a scope you may not hold, and anything that suggests public-sector status such as "Council", "Authority", or "Royal". If you plan to operate multiple homes under one provider company, consider naming the company neutrally — "Meridian Care Group Ltd", for example — and giving each home a trading name that Ofsted registers separately. This keeps the commercial brand tidy and lets you add homes to your portfolio without creating a new limited company for every site.
Company-name mismatches between Companies House and the SC1 application — even single-word differences such as "Care Homes Ltd" versus "Children's Home Ltd" — are one of the three most common reasons Ofsted returns children's home registration applications for correction.
Articles of association clauses relevant to children's homes
Most small children's home operators incorporate using Companies House's model articles, which are sufficient for single-director or small family-owned companies where the directors and shareholders are the same people. Model articles work out of the box and require no drafting. If your ownership structure is more complex — outside investors, separate operating and property companies, or multiple classes of share — you will need bespoke articles, and three clauses deserve attention during drafting. The first is the objects clause. Private companies limited by shares are not required to state objects under the Companies Act 2006 (objects default to "any lawful activity"), but lenders and local-authority commissioners sometimes ask for objects restricted to children's residential care. Narrowing objects can reassure stakeholders but reduces flexibility for future pivots into related services. The second is related-party transaction rules. Many children's home operators hold the residential property through a separate entity and let it to the operating company. If the directors of both entities overlap, this is a related-party transaction, and articles should reference how related-party leases and service charges are approved — a process local authorities scrutinise during placement audits. The third is decision-making thresholds for care-critical decisions. Appointing or removing a registered manager, accepting a placement of a child with high-risk needs, and closing the home are all decisions where the articles can require more than a simple majority or require written sign-off from the Responsible Individual. Building these thresholds into the articles is more robust than relying on a separate shareholders' agreement.
Companies House model articles are sufficient for most single-director children's home companies, but bespoke articles are advisable where the operator and property-owning entity are separate, where outside investors hold shares, or where decision-making thresholds for registered-manager appointments and placement acceptance need to exceed a simple majority.
Persons of Significant Control and the Fit Person test
Companies House requires every UK company to maintain a register of Persons of Significant Control (PSCs). A PSC is anyone who directly or indirectly holds more than 25% of the shares, holds more than 25% of the voting rights, has the right to appoint or remove a majority of the directors, or otherwise exercises significant influence or control over the company. The PSC register must be kept current at Companies House and changes filed within 14 days of the change taking effect. Ofsted cross-references your PSC register against the Fit Person assessments carried out under Regulations 32 and 33. Every PSC is a candidate for Fit Person scrutiny because Ofsted treats the people who ultimately control the provider as the people who are ultimately responsible for the quality of care. A PSC with a relevant unspent conviction, an unsatisfied adverse insolvency history, or a history of regulatory action in another care sector will block the registration — not because of company law, but because of the Fit Person standard. Two practical implications follow. First, know every PSC before you apply. A silent investor whose ownership has not been formally recognised as a PSC at Companies House is both a Companies House offence and an Ofsted registration problem. Second, do the DBS, financial, and regulatory homework for every PSC before submitting SC1 — it is far better to uncover a problem in private and restructure ownership than to face a refusal on fitness grounds with the ownership public on the Companies House record.
Ofsted cross-references the Companies House Persons of Significant Control register against its Fit Person assessments under Regulations 32 and 33 of the Children's Homes (England) Regulations 2015 — every PSC holding more than 25% of shares or voting rights is a candidate for the fitness review, and an undisclosed PSC is both a Companies House offence and an Ofsted registration problem.
Matching Companies House details to your SC1 application
Before you submit the SC1, the provider details on the form must match the Companies House record exactly. The word "exactly" is deliberate: Ofsted caseworkers use a field-by-field comparison, and a missing "The" at the front of a name, a transposed digit in a company number, or a registered-office change not yet filed will all cause a returned application. Run this checklist before submission. Check the company name character-for-character, including punctuation and whether you used "Ltd" or "Limited" on both documents. Confirm the company registration number is all 8 digits (or 7 plus a leading zero, with no formatting). Verify the registered office address appears exactly as it does on the Companies House filing, not a trading address. Check that every director's name matches their Companies House record, which in turn should match passport and DBS records. Confirm the PSC names and ownership percentages are current as filed. Verify the SIC code (87900 or the agreed residential care code) matches the filed SIC list. Finally, confirm the company status on Companies House shows "Active" — dormant and in-liquidation statuses will not accept a registration. If you spot any discrepancy, file the correction at Companies House first (most changes are free or small fixed fees), wait 24 hours for the public record to update, then submit SC1 using the corrected details. Submitting SC1 first and correcting Companies House afterwards is the more common order of operations and the more common source of delays.
The SC1 application requires character-for-character matching with the Companies House record on company name, number, registered office, directors, PSCs, SIC code, and company status — correct any discrepancy at Companies House first, wait 24 hours for the public record to update, then submit SC1.
Changing company details mid-application
Once the SC1 is with Ofsted, the safest rule is to make no Companies House changes until the registration decision is issued. Any change — a new director, a new PSC, a registered office move, a company name change — creates a delta between the record Ofsted validated and the record as it stands, and that delta triggers re-checks that lengthen the assessment window. Sometimes changes are unavoidable. If a director resigns mid-application, file the TM01 at Companies House within 14 days as the law requires, then notify Ofsted by email with the date, the Companies House filing reference, and written confirmation that the remaining directors and PSCs are unchanged. Do not wait for the registration decision before filing at Companies House — that is a companies law breach. But do proactively flag the change to Ofsted so they can verify the new structure still meets the Fit Person standard. Company name changes mid-application are the most disruptive. Ofsted will usually pause the registration, ask you to resubmit a corrected SC1, and restart the cross-checks. Avoid them unless the name change is itself prompted by an Ofsted request. If the change is substantive — a new controlling shareholder, a merger, or a conversion from limited company to charity — assume the application will be withdrawn and re-submitted from scratch. Plan substantive structural changes before SC1 submission, not during the registration window.
Companies House changes filed after SC1 submission — new directors, new PSCs, registered-office moves, or name changes — create a delta between the record Ofsted validated and the current record, triggering re-checks and, for substantive changes such as new controlling shareholders, a requirement to withdraw and resubmit the application.
Frequently Asked Questions
Can I register a children's home as a sole trader?
Legally yes — Regulation 5 of the Children's Homes (England) Regulations 2015 allows an individual to be the registered provider. Commercially it is rare because sole traders carry unlimited personal liability for operational risks, and local-authority commissioning teams routinely require corporate insurability before placements are signed. If cost or simplicity is the driver for sole-trader registration, incorporate through Companies House first — the £50 online fee is a small investment against the legal and commercial exposure of unlimited liability in residential childcare.
Does the provider company need to be the same legal entity as the property owner?
No, and in many cases separation is preferable. A common structure is one company (the property company) owning the residential premises and letting it to a second company (the operating company) that holds the Ofsted registration. This structure protects the property from operational-liability risks and can simplify refinancing. The trade-off is that inter-company rent and management charges become related-party transactions that local authorities and Ofsted will scrutinise during placement audits, so the lease and charges must be at fair-market rates and documented in the operating company's articles or a written services agreement.
How long does Companies House incorporation take?
Online incorporation through Companies House's digital service is typically complete within 24 hours, often within the same working day. The current online fee is £50 following the May 2024 fee restructure. Paper incorporation via form IN01 takes 8 to 10 working days and costs £71. For a children's home application, online incorporation is the only sensible route — you want the public Companies House record live as early as possible so you can order DBS certificates in the company's name, open a business bank account, and complete the SC1 with a company number that has been visible on the public record for more than a few days.
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