Business - Company Incorporation (4) Flashcards
What documentation is required to apply for incorporation at Companies House?
Documentation: The following documents are submitted.
(1) Form IN01: The main details of the Company are submitted on Form IN01 alongside a fee. It also contains a statement of compliance, confirming all incorporation requirements are met.
(2) Constitution: The Memorandum and any bespoke Articles of Association are filed. These comprise the initial constitution of the business (Model Articles and Shareholders Agreement need not be filed).
What happens once an application for incorporation has been submitted?
Post-Application: Companies House will decide on the application, and consider issues such as disqualified directors.
(1) Incorporation: Companies House will issue a ‘Certificate of Incorporation’, acting as conclusive evidence of registration. It states the company name, registration number, date of incorporation, type of company, type of shares, and office address (s15).
(2) Corporation Tax: Companies must register with HMRC for corporation tax. Registration is automatic following online applications, but must be manually sought within 3 months of postal applications.
(3) Asset Transfer: Companies may be required to transfer unincorporated business assets if they have converted.
What are the additional requirements for incorporation of public companies?
Public Companies: There are more stringent requirements to incorporate a public company.
(1) Minimum Share Capital: The authorised share capital must be at least £50,000, fully paid up to a quarter of nominal value, with all premiums paid (s586).
(2) Directors and Shareholders: There must be at least 2 directors and 1 shareholder.
In terms of the IN01 form what needs to be filled in for the name?
Name: Companies require a legal name. They may trade under an alternative ‘trading’ name. Both are subject to restrictions.
(1) Length/Grammar: Names must use specific characters, and cannot exceed 160 characters including spaces.
(2) Suffix (Ltd/Plc): Companies must end with ‘Limited/Ltd’ or ‘Public Limited Company/Plc’ as appropriate.
- Or Welsh equivalents.
- Does not apply to companies limited by guarantee or charitable companies.
(3) Similar Names: Companies cannot have a similar name to another company, unless part of the same group.
- This means ‘merely similar’ (Sch 3 Names Regs 2015).
(4) Restricted Names: A number of names are restricted or prohibited.
- Offence: Names that are legally or in the opinion of the Secretary of Business offensive (s53).
- Government: Names suggesting a link to government/public bodies must be approved by SoB (s54).
- Status: Names denoting a certain status, i.e. ‘British’, ‘Dental’, ‘Association’ must be approved by SoB.
In terms of the IN01 form what needs to be filled in for the registered address?
Registered Address: A registered address is required for service of correspondence, and storing minutes/registers (s86). This must be in the same home-nation of the company.
In terms of the IN01 form what needs to be filled in for the management?
Management: Information on company management must be supplied.
(1) First Directors: The name and date of birth of first directors (ss155-157).
- Number: Minimum 1 (Ltd) or 2 (Plc).
- Requirements: At least one natural/human (must be 16+).
(2) Directors Residential and Service Addresses: Residential and service addresses of directors must be given.
- Residential addresses only made public to specific public authorities and credit agencies.
(3) Company Secretary: The name and service address of a company secretary (s270).
- Mandatory for public companies, optional for limited companies.
In terms of the IN01 form what needs to be filled in for the shareholders?
Shareholders: Certain shareholder information must be supplied.
(1) First Shareholders: The names and addresses of first shareholders.
- Generally two shareholders with £1 ordinary share each.
(2) People With Significant Control: Shareholders with >25% votes/shares or ability to change majority of board.
- Classes: Either: a) More than 25% up to 50%; b) more than 50% less than 75%; or c) 75% or more.
- i.e. a) block special resolutions; b) pass ordinary resolutions; c) pass special resolutions.
In terms of the IN01 form what needs to be filled in for the shares?
Shares: Certain share information must be supplied.
(1) Statement of Capital: The number, type and total nominal value of all shares.
(2) Prescribed Particulars: The voting, sale, and dividend rights attached to each type of share.
Once incorporated what further decisions may be required in terms of management?
Management: Further appointments and contracts may be required.
(1) Chair: A director may be appointed chair, to direct meetings and break deadlocks (MA 13).
(2) Service Contracts: Directors may require service contracts, stipulating their duties, salary and hours.
- OR required to approve >2 year fixed term contracts.
Once incorporated what further decisions may be required in terms of the company name?
Name: The company name may require changing (especially for shelf-companies).
(1) Resolution: Changed by special resolution (subject to articles) (s77).
(2) Filing: Special resolution, name, and fee to CH (Form NM01). New certificate of incorporation is issued (ss80-81).
Once incorporated what further decisions may be required in terms of the registered address?
Registered Address: The registered address can be changed, or an alternative filing location elected.
(1) Change of Address: Changed by board resolution, and filed at CH (Form AD01).
- Correspondence can be sent to the old address for the next 14 days.
(2) SAIL: A ‘Single Alternative Inspection Location’ may be used for filing, if notified to CH (Form AD02/03).
Once incorporated what further decisions may be required in terms of the company seal?
Company Seal: A company seal may be adopted to execute official documents.
(1) Resolution: Adopted by board resolution (s44).
(2) Formalities: Execution with seal, signed and witnessed by a director. Attestation can be removed by SR (MA 49).
Once incorporated what further decisions may be required in terms of the accounts?
Accounts: Several accounting formalities are required.
(1) Accounting Reference Date: The date by which final accounts must be prepared.
- Default: Final day of the month of incorporation (s391).
- Change: Changed by board resolution and filed at CH (Form AA01).
>Cannot be changed by more than 18 months, or more than every 5 years (s392).
(2) Auditor: An auditor should be hired to complete the annual accounts (s394).
- Small companies are exempt if certain criteria are met (ss382;477).
(3) Bank Account: A business bank account should be created, and authorisation provided as required.
Once incorporated what further decisions may be required in terms of the tax?
Tax: Companies must initiate various tax procedures.
(1) Corporation Tax: HMRC provide an introductory pack to complete the corporation tax registration process.
(2) PAYE/NI: Companies must ensure PAYE and NI is completed online.
(3) VAT: Companies may be required to register for VAT (requires board resolution).
>Voluntary until more than £90,000 business turnover in last 12 months.
Once incorporated what further decisions may be required in terms of the insurance?
Insurance: Various insurance policies may be prudent or mandatory; this will differ by company.
