Limited Company Flashcards
Procedure for forming a company
The applicant must submit to Companies House:
1. Companies House form IN01
2. memorandum of association
3. company’s articles of association (if any)
4. applicable fee
Company House in Cardiff processes application for England and Wales
Companies House in Edinburgh and Belfast process for Scotland and Nothern Ireland
Application may be made online, by post or through a software
Contents of Certificate of incorporation
- name and registered number
- date of incorporation
- whether limited by share or guarantee or unlimited liability
- private or public
- registered address
Certificate will be signed by the Registrar or authenticated by the Registrar official seal.
Registration for corporation tax
- Companies submitting online will be registered for corporation tax automatically
- Application by post or software, application must submit a separate application to HMRC within 3 months of starting business, for the company to be registered for corporation tax.
Information required for company to be set up
Form IN01 requires:
1. Company name:
(a) required ending limited, ltd or plc, public limited company.
(b) must not be same as existing company
(c) prohibited and restricted name
2. Registered office: public available
3. First directors: every company must have at least 1 human director, and must be 16 or over. Public companies must have two or more. Must fill in details of date of birth and name (only month and year shown on public register).
4. Directors’ service addresses: usually use company’s registered office.
5. Company secretary: private companies do not have to have a company secretary but may choose to have one, if so they must register details in IN01.
6. First shareholder(s): subscribers : full details need to be in IN01
7. Statement of capital:
(a) number of shares of each type, nominal value (share capital)
(b) name and addressess of subscribers
Company’s constitution
- Company’s constitution:
a) memorandum of association must be in form set out in Companies (Registration) Regulations 2008
b) articles of association: Model Articles set out in Companies (Model Articles) Regulations 2008: will apply in default unless applicant submit a bespoke set of articles when applying to incorporate. Many companies wishes to exclude MA14 which prevents director from voting when their personal interests are subject matter.
b) certificate of incorporation,
c) statement of capital,
d) any court order/legislation/shareholders’ resolution altering company’s constition
Companies Act 1985 and Table A
- Companies Act 2006 came in full force on 1 October 2009. Any companies incorporated from this date will have Model Articles or amended form MA.
- Those incorporate before October 2009 are likely to have Table A articles (consistent with Companies Act 1985) which have some differences from MA (e.g 21 days notice for GMS for special resolution in Table A, 14 days notice for GMS for any kind of resolution in MA)
Amending the articles
- Shareholder can amend articles by a special resolution (must be passed by at least 75% of shareholders.
- Must file a copy of amended articles to Companies House within 15 days from taking effect
- Must file copy of special resolution with 15 days after it is passed.
People with significant control
IN01 requires to declare people with significant control:
1. hold more than 25% of shares
2. hold more than **25% of the voting rights **
3. hold the right to appoint or remove a majority of the board of directors of the company
Once a company has been incorporated , it must keep a register of persons with significant control.
Registering as public company
- Applicant must comply with requirements for public company.
- Articles : Model Articles to public companies apply unless applicant provide bespoke.
- Companies House will issue a certificate of incorporation
- Before commence trading, it must obtain a trading certificate as proof that it can trade, borrow and has met the alloted share capital requirement. Application for trading certificate is on form SH50.
Converting to public company
- To change from private to public, company must pass a special resolution approving re-registration of company, altering company’s name and articles. At the time of special resolution, company must have satisfied share capital requirement.
- Trading certificate is not required as CH only re-register if it satisfies the capital requirement.
- Application dossier include:
(a) Application form RR01 (which includes statement of compliance)
(b) special resolution
(c) revised articles
(d) balance sheet and written statement from company’s auditors; a valuation report of any shares which have been alloted for non-cash consideration between date of balance sheet and date of special resolution. - CH will issue certificate of incorporation provig the company existence and status of public company.
What are shelf companies?
A company that has already been set up, usually with 2 directors and 2 shareholders, each of whon own one ordinary share of GBP1, formed and left on the shelf at law firm until such time as a client needs a company quickly.
Director and initial subscribers will be employees of the law firm.
Post incorporation steps
After incorporation, the directors will have a board meeting/pass a written resolution to make decisions on:
1.** Chairperson: chair has casting vote in the event of board resolution being tied.
2. Bank account: no requirement to have but needed in practice
3. Company seal: no requirement, if they choose to have one, they can adopt one by board resolution. MA 49 provides that where a company seal is used to execute a document, the doc must be signed by at leaset 1 authorised person in the presence of a witness who attests the signature. (Company may use to dissaply MA49.
4. Changing the company name/adoption a business name: especially in case of shelf company. Use form NM01 to change name
5. Accounting reference date: a date up to which it must prepare its annual accounts will be the last day of the month on which company was incorporated (e.g. incorporated in 9/9, accounting reference date would be 30/9). Company can extend accounting reference date (but no more than 18 months) and fille AA01 form to CH
6. Appoint auditor: all companies must prepare annual accounts. Small companies are exempt from audit.
7. Service contracts:** employment contracts for directors
8. Tax registration: CH automatically notify HMRC of registration of new company, HMRC will send the company an introductory pack concerning tax
9. Corporation tax: the pack will include a form must be completed and returned to HMRC.
10. PAYE and National Insurance
11. VAT: must register for VAT with HMRC
