15. Company incorporation Flashcards
What are the steps in incorporation a company?
- 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.
What is a fast incorporation?
same day incorporation at a higher fee
What is a shelf company?
Company that has already been incorporated by a service provider and is instantly available to use
What is a reserved company?
incorporated by service providers and transferred within six months.
In what circumstances will the registrar refuse to register a name?
- 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
What is the memorandum of association?
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)
What would the Memorandum of Association also include prior to the effect of CA 2006?
- 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.)
What do the Articles of Association include?
- 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
What are the model articles?
Articles created by the Companies Act 2006. These may be adapted entirely, partly or excluded entirely.
What information is required for the registration application?
- 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
What is a statement of compliance?
Confirms that the requirements of CA 2006 have been complied with.
Who may need a trading certificate?
A public company before they commence business or exercise borrowing powers.
What are the post incorporation procedures of a company?
- Hold an inaugural meeting
- Issue share certificates
- Update register of members
- Update register of directors
What does the certificate of incorporation include?
- 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
What matters are discussed at the inaugural meeting?
- Certificate of incorporation
- Appointed of directors, chairperson, secretary
- Noting the registered office
- Appointing solicitors, bankers, auditors
- Allotting shares
- Adopting company seal, authorised signatory list
What is included in the register of members?
- Names and addresses of members
- Date when person registered as member
- Date ceased to be a member
- Number of shares held
Who must the register of members be available to?
Must be kept available for inspection by any member of the company without charge and by any other person upon payment of fee.
What information is included in a register of directors?
- Name and former name
- Service address
- Resident country
- Nationality
- Business occupation
- Date of birth
What is a share?
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.
What is the authorised share capital?
The total amount of share capital which the company is authorised to issue.
What is the nominal value?
(aka par value)
Amount (currency) shown on a share certificate
What is issued share capital?
Nominal value of shares which have been issued to members
What is called up share capital?
Value of issued shares that remain unpaid, and whose holders have been called upon to pay for the shares.
What is paid up share capital?
Aggregate amount of money paid up on shares which have been issued.
What is reserved capital?
Capital which the company has resolved not to call except in the course of winding up.
What are par value companies?
Registered with a share capital and have shares which are expressed as having a nominal value.
What are non par value companies?
Have shares not denominated in any currency. They have unlimited shares and may have a guarantor.
What are the different types of shares that could be issued?
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
Rights of members when transferring shares.
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?
What must share certificates include according to the CA 2006?
- How many shares and what class
- Nominal value of shares
- That shares a fully paid
- any distinguishing numbers assigned to them(?)
What is a dividend?
A share of the after-tax profits of a company distributed to its shareholders.
Companies can only distribute from realised profits, not anticipated profits.
What documentation would be required to be kept at the registered office?
- Register of members, directors, secretary and charges
- Minute book
- Memorandum and AoA
- Certificate of incorporation
- Common seal
- Register of sealing
How may the common seal of a company be used?
Only used by the authority of the directors and signed by at least one authorised person and a witness.
What is the register of sealing?
Keeps a record of what has been sealed.
