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IFA Level 4 - Core > 15. Company incorporation > Flashcards

15. Company incorporation Flashcards

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1
Q

What are the steps in incorporation a company?

A
  • A company is formed under the Companies Act 2006 by subscribers whose name are included in the Memorandum of Association
  • Available names need to be checked with the Companies House to ensure that there is no existing company with the same or similar name
  • Incorporation documentation is delivered to Companies House, including application form, registration of Memorandum of Association and a copy of Articles of Association, statement of compliance and fee.
  • Upon incorporation, a certificate of incorporation is issued, which is conclusive evidence of the incorporation of the company.
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2
Q

What is a fast incorporation?

A

same day incorporation at a higher fee

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3
Q

What is a shelf company?

A

Company that has already been incorporated by a service provider and is instantly available to use

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4
Q

What is a reserved company?

A

incorporated by service providers and transferred within six months.

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5
Q

In what circumstances will the registrar refuse to register a name?

A
  • Existing company with similar/identical name
  • Name does not contain the required ‘ltd’, ‘plc’ or ‘unlimited’
  • name is offensive
  • use of name would be a criminal offence
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6
Q

What is the memorandum of association?

A

Short document evidencing the subscribers’ intention to form a company and agree to (requires signature):

  • Name of company
  • Share capital
  • Limited liability
  • Intended duration (if applicable)
  • Public company (if applicable)
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7
Q

What would the Memorandum of Association also include prior to the effect of CA 2006?

A
  • Location of registered office
  • A statement that the company is a public company (if applicable)
  • Objects of the company - clause that restricted the activities of the company to those contained within ( if a company undertook an activity that was not included, the act was ultra vires (outside the company’s powers) and void.)
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8
Q

What do the Articles of Association include?

A
  • Notice and conduct of meeting
  • Winding up
  • Appointment of directors
  • Company seal and signing authority
  • Dividends and reserves
  • Accounts and audit
  • Minute book
  • Votings at meetings
  • Directors and secretary
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9
Q

What are the model articles?

A

Articles created by the Companies Act 2006. These may be adapted entirely, partly or excluded entirely.

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10
Q

What information is required for the registration application?

A
  • Company’s proposed name
  • Address of registered office
  • If liability is limited
  • Public or private company
  • Names and particulars of directors and secretary
  • Model articles or own
  • Details of share capital and subscribers
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11
Q

What is a statement of compliance?

A

Confirms that the requirements of CA 2006 have been complied with.

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12
Q

Who may need a trading certificate?

A

A public company before they commence business or exercise borrowing powers.

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13
Q

What are the post incorporation procedures of a company?

A
  • Hold an inaugural meeting
  • Issue share certificates
  • Update register of members
  • Update register of directors
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14
Q

What does the certificate of incorporation include?

A
  • The name and registered number of the company
  • Date of incorporation
  • Whether limited or unlimited company
  • If it is a private or public company
  • Where it is registered
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15
Q

What matters are discussed at the inaugural meeting?

A
  • Certificate of incorporation
  • Appointed of directors, chairperson, secretary
  • Noting the registered office
  • Appointing solicitors, bankers, auditors
  • Allotting shares
  • Adopting company seal, authorised signatory list
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16
Q

What is included in the register of members?

A
  • Names and addresses of members
  • Date when person registered as member
  • Date ceased to be a member
  • Number of shares held
17
Q

Who must the register of members be available to?

A

Must be kept available for inspection by any member of the company without charge and by any other person upon payment of fee.

18
Q

What information is included in a register of directors?

A
  • Name and former name
  • Service address
  • Resident country
  • Nationality
  • Business occupation
  • Date of birth
19
Q

What is a share?

A

A right to a specified amount of the share capital of a company, carrying with it certain rights and liabilities, while the company is going concern and in its winding up.

20
Q

What is the authorised share capital?

A

The total amount of share capital which the company is authorised to issue.

21
Q

What is the nominal value?

A

(aka par value)

Amount (currency) shown on a share certificate

22
Q

What is issued share capital?

A

Nominal value of shares which have been issued to members

23
Q

What is called up share capital?

A

Value of issued shares that remain unpaid, and whose holders have been called upon to pay for the shares.

24
Q

What is paid up share capital?

A

Aggregate amount of money paid up on shares which have been issued.

25
Q

What is reserved capital?

A

Capital which the company has resolved not to call except in the course of winding up.

26
Q

What are par value companies?

A

Registered with a share capital and have shares which are expressed as having a nominal value.

27
Q

What are non par value companies?

A

Have shares not denominated in any currency. They have unlimited shares and may have a guarantor.

28
Q

What are the different types of shares that could be issued?

A

Ordinary shares- right to vote at general meetings and to receive a dividend (if one is paid).
Preference shares - no right to vote at meetings, but usually have the right to be paid a fixed dividend and to be paid before ordinary shareholders in the event of liquidation.
Redeemable shares - can be repurchased by the company at a future date
Bearer shares - owned by whoever has them in their possession

29
Q

Rights of members when transferring shares.

A

Members are usually able to transfer their shares freely, although pre-emption rights may be granted to existing members.
Pre-emption rights required new shares to be offered to existing shareholders first?

30
Q

What must share certificates include according to the CA 2006?

A
  • How many shares and what class
  • Nominal value of shares
  • That shares a fully paid
  • any distinguishing numbers assigned to them(?)
31
Q

What is a dividend?

A

A share of the after-tax profits of a company distributed to its shareholders.

Companies can only distribute from realised profits, not anticipated profits.

32
Q

What documentation would be required to be kept at the registered office?

A
  • Register of members, directors, secretary and charges
  • Minute book
  • Memorandum and AoA
  • Certificate of incorporation
  • Common seal
  • Register of sealing
33
Q

How may the common seal of a company be used?

A

Only used by the authority of the directors and signed by at least one authorised person and a witness.

34
Q

What is the register of sealing?

A

Keeps a record of what has been sealed.

IFA Level 4 - Core (14 decks)

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