SGS 1 (Company Structure)

Question 1

Company and LLP disclosure requirements?

Answer 1

Company accounts; registered office; director, secretary and member info; share capital; PSC register; certain resolutions. If large (two of: annual turnover of £36m, total assets £18m, average of 250 or more employees), bi-annual publication of payment practises after April 2017.

As above but details of members and ‘designated members’.

Question 2

What is a partnership? Why is it disadvantageous?

Answer 2

Very easy to set up (relationship between persons carrying out business in common with a view of profit s.1(1) PA 1980, no need for intention to create or formalities)

Unlimited personal liability on joint basis (contract) or joint and several (tort).

Question 3

LLP liability and statute?

Start-Up Costs?

Answer 3

Limited Liability Partnership Act 2001

Liability limited up to amount of contribution (NB limited liability lost if business carried on for over 6 months with only one member.

Incorporation document, registration fee, LLP agreement (highly recommended over default provisions), LLP stationery

Question 4

Liability of a company?

Start up?

Answer 4

Limited to amount unpaid on shares.

need incorporation docs, AA, registration fee.

Question 5

Steps in new client engagement up to file opening?

Answer 5

AML
Conflict checks
Competent firm?

Question 6

After opening of file steps?

Answer 6

Inform about costs

Confirm status

Inform of complaint’s handling procedure

client care letter (get signed)

Question 7

Include in client care letter?

Answer 7

Scope of instruction, who’s in the team, contact details, timescale.

Question 8

What is required before a private or public company begins trading?

Answer 8

s.15(4) - certificate of incorporation
Ltds can commence business as soon as incorporated
Plus require a TRADING CERTIFICATE showing company’s allotted share capital is not less than minimum.

Question 9

Which business forms have separate legal entities?

Answer 9

Limited Company and LLP.

Question 10

Number of people required to set up:
Sole Trader
Partnership 
LLP 
Ltd Company

Answer 10

1
2
2
1

Question 11

Any potential expenses in relation to a partnership?

Answer 11

none necessary but recommended to have a partnership agreement drawn up by lawyers.
PA 1890 fallback provisions are old fashioned e.g. s.26 if one partner leaves, whole partnership dissolved; s.24(1) equal profit entitlement; s.24(6) no salary; s.25 unanimous consent to expel a partner.

Question 12

Company and LLP ongoing expenses?

Answer 12

Accounts and Confirmation Statement at least once a year.

Question 13

Big advantage of LLP?

Answer 13

Matters of governance tend to be left to partnership agreement, few formalities associated with company management procedures.

Question 14

What is a business plan?

Answer 14

A document with key information, provided to an investor in order for that investor to decide whether or not to invest.