Companies House Setup for Children's Homes: SIC Codes, PSCs, and Matching the SC1 Application

Ofsted does not require a children's home to be operated through a limited company — but in practice, the vast majority are, because the legal entity has to match the SC1 application and carry the provider's liabilities.

Who can be the registered provider

Ofsted registers the "registered provider" under Regulation 5 of the Children's Homes (England) Regulations 2015. That provider can be:

• An individual (sole trader).
• A partnership or limited liability partnership.
• A limited company.
• A charitable organisation.

What matters in law is that the provider is a Fit Person under Regulation 33, that any responsible individual is correctly nominated, and that the legal entity can hold the liabilities and compliance responsibilities registration imposes.

Why a limited company is the default

• Limited liability shields directors' personal assets from operational risks, which in residential childcare can be significant.
• Insurers underwrite corporate entities more readily than sole traders, and placement-indemnity premiums are often materially lower.
• Commissioning local authorities typically require providers to be incorporated before placement contracts are signed.

Charitable trusts and community interest companies (CICs) also register children's homes, with specific advantages around grant funding and local-authority preference.

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.

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.

Alternatives and what to avoid

• Homes whose primary focus is children with learning disabilities, mental-health conditions, or substance misuse may use SIC 87200. But 87900 is the safe default for a general children's home.
• You can register up to four SIC codes — an operator might add 85600 (Educational support services) if the home provides in-house education — but the first-listed SIC should always be the residential care code.

Choose a company name that exactly matches the provider name you will state on the SC1 — Ofsted does not approve company names, but it does compare the Companies House record against the SC1 application.

Restricted and sensitive words

Under the Companies Act 2006, using words like "charity", "foundation", "institute", "association", and "trust" 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 suggesting public-sector status — "Council", "Authority", "Royal".

Three articles of association clauses matter for children's homes — the objects clause, related-party transaction rules, and decision-making thresholds for care-critical decisions — though most small operators can use 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.

When you need bespoke articles

If your ownership structure is more complex — outside investors, separate operating and property companies, or multiple share classes — you will need bespoke articles. Three clauses deserve attention:

• The objects clause. Private companies limited by shares need not state objects (they default to "any lawful activity"), but lenders and commissioners sometimes ask for objects restricted to children's residential care. Narrowing objects reassures stakeholders but reduces flexibility for future pivots.
• Related-party transaction rules. Many operators hold the property through a separate entity and let it to the operating company. If directors overlap, this is a related-party transaction — articles should reference how related-party leases and service charges are approved.
• Decision-making thresholds for care-critical decisions. Appointing or removing a registered manager, accepting a high-risk placement, and closing the home are decisions where the articles can require more than a simple majority, or written sign-off from the Responsible Individual.

Ofsted treats every Person of Significant Control (PSC) on the Companies House register as a candidate for the Fit Person test — every UK company must maintain a PSC register, and Ofsted cross-references it against its fitness assessments.

Who is a PSC

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.
• Otherwise exercises significant influence or control over the company.

The PSC register must be kept current at Companies House, with changes filed within 14 days.

How Ofsted uses the PSC register

Ofsted cross-references your PSC register against the Fit Person assessments under Regulations 32 and 33 — it treats the people who ultimately control the provider as the people ultimately responsible for the quality of care.

Two practical implications: know every PSC before you apply (a silent investor whose ownership has not been formally recognised is both a Companies House offence and an Ofsted problem); and do the DBS, financial, and regulatory homework for every PSC before submitting SC1 — far better to uncover a problem in private and restructure ownership than to face a refusal on fitness grounds.

Match Companies House details to your SC1 by checking, before you submit, that every provider detail on the form is exactly as filed at Companies House. Ofsted caseworkers use a field-by-field comparison — a missing "The", a transposed digit, or an unfiled registered-office change will all cause a returned application.

Pre-submission checklist

• Company name — character-for-character, including punctuation and whether you used "Ltd" or "Limited" on both documents.
• Company registration number — all 8 digits (or 7 plus a leading zero), with no formatting.
• Registered office address — exactly as filed at Companies House, not a trading address.
• Every director's name — matching their Companies House record, which should match passport and DBS records.
• PSC names and ownership percentages — current as filed.
• SIC code — 87900 (or the agreed residential care code) matching the filed SIC list.
• Company status — showing "Active"; dormant and in-liquidation statuses will not accept a registration.

You can, but once the SC1 is with Ofsted the safest rule is to make no Companies House changes until the registration decision is issued. Any 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.

When a change is unavoidable

If a director resigns mid-application, file the TM01 at Companies House within 14 days as the law requires — do not wait for the registration decision, that is a companies law breach. Then notify Ofsted by email with the date, the Companies House filing reference, and written confirmation that the remaining directors and PSCs are unchanged, so they can verify the structure still meets the Fit Person standard.

Plan substantive structural changes before SC1 submission, not during the registration window.