4. incorporating a company Flashcards
Can a company enter contracts pre-incorporation?
NO (s.16(3))
- company only becomes legal entity from date of incorporation
- before being a legal entity, it cannot exercise the function of a company
what if a company tries to enter into a contract pre-incorporation?
person who signed it = personally liable (s.51) (no agency because principal doesn’t exist)
company (once incorporated) = no consequence (unless novation)
parent company = could possibly argue it was the principal IF apparent authority (i.e. other side thought person was acting on as agent for holding company)
Choosing a name?
s.53 onwards - rules for company names
Also:
- IP law (TM and passing off)
how to change name?
SR (S.77)
Notice to reg after - s.78
Reg will enter new name on register in place of former name and issue new certificate of incorporation (s.80)
when does new name have effect?
from the date new certificate of incorporation is issued (s.81(1))
how do you form a company?
s.7
1 or more persons…
- subscribing names to memorandum of association
- comply with requirements of this act to reg (s.9-13)
what is the memorandum of association?
s.8
states members:
- wish to form a company
- agree to become members of the company (and if share cap, take at least 1 share each)
MUST BE IN PRESCRIBED FORM AND AUTHENTICATED BY EACH SUBSCRIBER
Registration documents
s. 9
1. memorandum of association
- IN01 (application for registration)
- statement of compliance
IN01
- PROPOSED name
- reg. office address
- limited liability? shares or guarentee?
- plc or ltd
- share cap? statement of cap, initial shareholdings
- officers
- articles
- statement of initial sig. control
- intended business activities
statement of cap and initial shareholdings
must be included in application for registration
states:
- total number of shares to be taken
- aggregate nominal value of shares
- aggregate nominal value unpaid on those shares
- identify subscribers
each subscriber: - number, nominal value, class of shares, amount paid up and amount unpaid
certificate of incorporation
- name and reg number of company
- date of incorporation
- limited or unlimited
- ltd or plc
- reg. office
FORMALITIES -
INCORPORATION FROM SCRATCH
- Memorandum of association
- IN01
- Fees
- Statement of intended address
(if on paper - articles of association)
FORMALITIES -
SHELF
CHANGE:
- name
- members (transfer shares)
- directors
- chairman
- secretary
- articles
- reg. address
- appoint auditors
- ARD
TIMING -
INCORPORATION FROM SCRATCH
ONLINE - within 24hrs (but can only apply during CH opening hours)
Paper - 48 hours or more
TIMING -
SHELF
Basically instant + not limited to opening hours of companies house
COST -
INCORPORATION FROM SCRATCH
ONLINE = £12
PAPER = £40 (£100 for same day)
COST -
SHELF
Legal fees for changing details fo the company
Cost of purchasing shelf company (usually nominal)
SUITABILITY -
INCORPORATION FROM SCRATCH
ONLINE = cheap and easy
PAPER = allows for bespoke articles (if using MA, do it online)
SUITABILITY -
SHELF
Immediate trading (no need to work around CH opening hours)
change of name
SR (s.77(1)a)
PMM:
- NM01 + fee within 14 days
- File SR
- name change takes effect when new cert of incorporation is issued
appointment of secretaries
BR (MA 3, MA5)
PMM:
- AP03 within 14 days
- update reg of secretaries
Resignation of secretaries
BM anyway so directors will consider and accept resignation there
PMM:
- TM02 within 14 days
- update reg of secretaries
Appointment of new directors
BR (or OR) - MA 17(1)a,b
PMM:
- AP01 within 14 days
- update reg
Resignation of existing directors
BM anyway so directors will consider and accept resignation there
PMM:
- TM01 within 14 days
- update reg
Appointment of new chairperson
outgoing director who was chairperson = auto ceases to be chairperson on resignation
new director votes for new chairman
BR (MA 12(1))
transfer of subscriber shares
BR to approve share transfer (not necessary but they have right to refuse so normal to approve)
BR to enter new member into reg of members
BR to instruct CS to issue new share certificate
PMM:
- update internal reg of members
- reg transfer with CH
- new share cert
- cancel old share cert
- update PSC
change of reg office
BR (s.87(1))
PMM:
- AD01 as soon as possible
- change takes effect upon notice BUT until end of 14 days beginning with date of registered, person can serve document at previous address validly
Change of accounting reference date
BR to instruct CS to complete required form
PMM:
- AA01 ASAP
APPOINT auditors
BR
