Companies Flashcards
Persons with significant control (PSC)
Details of PSCs must be provided to Companies House. In general, PSCs are shareholders with over 25% of shares.
Advantages of incorporating as a company
- limited liability
- minimised risk
- gives formal structure for the business to run
- easier to raise finances through the issue of shares/ loans because a floating charge can be granted
- Potential for return on investment through dividends
Disadvantages of incorporating as a company
- for small private companies where the directors and the shareholders are the same people, the effective separation of ownership is not achieved
- high levels of formality
- Public disclosures are necessary
Disadvantages of incorporating as a company
- for small private companies where the directors and the shareholders are the same people, the effective separation of ownership is not achieved
- high levels of formality
- Public disclosures are necessary
Public company, minimum share requirement
£50k
Minimum share holder requirement for PL and PLC
1
Minimum share holder requirement for PL and PLC
1
Minimum director for PL v PLC
PL- 1
PLC- 2
Is a company sec required for a PL v PLC
PL- no
PLC- yes
Minimum share capital for PL
at least 1 share, could be 1 p
Can a PL v PLC start staring without a certificate?
PL- no, certificate of Incorporation s15(4)
Can start trading as soon as it is incorporated
PLC- yes, certificate of Incorporation s15(4)
+ Cannot commence trading until a trading certificate is issued by Registrar showing that the company’s allotted share capital is not less than the minimum s761(1)(2)
Company does not need to be listed to offer shares to the public. When becoming a PLC, the company will apply to get certificate.
When can a PL v PLC use a written resolution?
PL- Permitted s288 – except for removing directors or auditors from office
PLC- not permitted
Minimum share holder requirement for PL and PLC
1
Is a company sec required for a PL v PLC
PL- no
PLC- yes
Public company, minimum share requirement
£50k
Minimum director for PL v PLC
PL- 1
PLC- 2
Persons with significant control
- Owns more than 25% of the shares or voting rights in the company
- Has the power to appoint or remove a majority of its board of directors, or
- Otherwise exercises ‘significant influence or control’ over the company
- All companies must maintain a register of PSCs which must be open to public inspection (s 790A – 790ZG)
- The intended purpose of the PSC register is to increase transparency so as to help combat tax evasion, money laundering and terrorist financing
- The PSC register must be filed at Companies House along with a company’s confirmation statement (annual statement confirming the company’s constitution and details)
