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Business Law and Practice > U3 + U4 Incoropating a Company > Flashcards

U3 + U4 Incoropating a Company Flashcards

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1
Q

What are the 2 ways a client can get a company?

A
  1. Incorporate a new company
  2. Buy a ‘Shelf Company’ - one that has already been incorporated by has not traded.
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2
Q

What 4 things must be sent to companies house to incorporate a company?

How may it be sent?

A
  1. Application to register - IN01 Form
  2. Memorandum of Association
  3. Articles of Association (IF NOT USING MODEL ARTICLES)
  4. Requisite Fee

This may be made by post or online. Same day incoporation service is available at a fee.

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3
Q

How many parts are there to the IN01 Form?

A

9 Parts

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4
Q

What is Part 1 of the IN01 Form?

What 5 things does it require?

A

Part 1 requires information on the Companies details.

This includes:

  1. Companies Name
  2. Company Type
  3. Principal Business Activity
  4. Situation of Registered Office and Registered Office Address
  5. Articles of Association (unless models articles are being used)
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5
Q

How can a company name be changed?

A

A special resolution

Then a NM01 must be filed, with a copy of the special resolution and required fee paid.

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6
Q

What must Private and Public Limited Companies include in their name?

A

Private Limited Companies must end with ‘Limited’ or ‘LTD’

Public Limited Companies must end with ‘Public Limited Company’ or ‘PLC’

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7
Q

What company names cannot be used?

3 Rules

A
  1. A name already in use
  2. Offensive words, or words referring to illegal activities
  3. ‘Sensitive word’ or any words that suggests a connection with the government or local authority
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8
Q

What is the diffrence between a trading and business name?

How can they both be changed?

A

The business name is the name registered at companies House.

The trading name is the name used by the face of the company.

A different trading name may be used, and this does not need to be disclosed to the company’s house.

To change a Business Name, a special resolution is required.

To create or change a trading name, a board resolution is sufficient.

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9
Q

How is a trading name created or changed?

A

The directors must decide via Board Resolution

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10
Q

What are the 3 Company Types?

A
  1. Public Company limited by Shares
  2. Private Company limited by Shares
  3. Private Company limited by Guarantee
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11
Q

How can the registered office address be changed?

A

By a board resolution and the filing of an AD01 Form.

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12
Q

What are the articles of association?

Who is the contract between?

A

The articles of association are an important constitutional document, acting as the company’s internal rulebook dealing with directors, shareholders, meetings and key administrative requirements.

They are a contract between:

  1. Shareholders and the company
  2. Shareholder and other Shareholders.
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13
Q

What are the model articles?

What are the 3 options a company has with regard the model articles?

A

Model Articles are the standard rules for different types of companies.

It is not compulsory to use the Model Articles, and Companies has the option to adopt:

		1. Model Articles in their Entirety 
		2. Model Articles with Some Amendments 
		3. Completely bespoke articles

The Model articles will apply unless each article is specifically excluded or modified.

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14
Q

How can the companies articles be changed

A

A special resolution is required, which must be filed together with the amended articles within 15 days of the resololution.

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15
Q

What are the 9 Parts of the IN01 Form?

A
  1. Company Details
  2. Proposed Officers
  3. Statement of Capital and Initial Shareholdings
  4. Statement of Guarantee (Only for companies limited by guarantee)
  5. People with Significant Control (PSC)
  6. Election to Keep information on the public register
  7. Consent to Act
  8. Statement about PSC Particulars
  9. Statement of Compliance
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16
Q

What are the 2 positions that must be included in Part 2 of the IN01 Form?

A

Part 2 of the IN01 Form requires information on:

**1. The Directors **

    1. Name
    1. Date of Birth (Month and Year)
    1. Nationality
    1. Business Occupation
    1. Service address and usual residential address
      (May apply for an exemption if publicising there address would put them at risk of violence or intimidation)
      **
      1. The Company Secretary (If there is one, optional for Private Companies) **
  • 1.Name
    1. Address for service
17
Q

What is a company secretary?

What information must be given to the company’s house if there is a company secretary?

A

The Company Secretary is responsible for keeping records and filing documents with the company’s house.

Their name and address for service must be provided to the company’s house.

18
Q

Are company Secretaries compulsory?

A

Company Secretaries are only compulsory for Public Limited Companies

19
Q

What information about directors must be given to companies house on incorporation?

5 things

A

Information required:

			1. Name 

			2. Date of Birth (Month and Year) 

			3. Nationality 

			4. Business Occupation 

			5. Service address and usual residential address

(May apply for an exemption if publicising there address would put them at risk of violence or intimidation)

20
Q

How Many directors are required?

A

Private Companies = Atleast 1
Public Companies = Atleast 2

Directors can be both ‘Human’ or a ‘Corporate’ body. However, there must always be at least 1 natural director

21
Q

What are the 2 exemptions to allow directors from not providing their residential address to show on companies house?

A

Directors must provide their usual residental adress to companies house unless they are awarded an exemption.

Directors may be exempt if publicising their address could lead to violence or indimidation.

For example, their company is controversial, or they are a public figure.

22
Q

What is the minimum age for a director?

A

Human Directors must be at least 16

23
Q

Can a director also be the company secretary?

A

Yes

24
Q

How many shareholders are required?

A

There must be at least one shareholder

25
Q

What 3 things does the statement of capital and initial shareholdings show? (Part 3 of the IN01 Form)

A

This shows:

  1. Initial Share Capital

(The number of shares of each type and their nominal value)

  1. Rights attached to the different types/classes of shares

(Ie voting powers and dividends)

  1. Initial Share Holdings

(Names and addresses of shareholders, details of their individual shareholdings, and any amount unpaid on their shares)

26
Q

What is Part 4 of the IN01 Form? It is compulsory?

A

Part 4 is the Statement of Guarantee.

It is only required for companies limited by Guarantee.

27
Q

What is Part 5 of the IN01 Form?

A

Persons with Significant Control

28
Q

What 3 criteria makes a person a person with significant control?

A
  1. More than 25% of Shares
  2. More than 25% of Voting Rights
  3. The right to appoint or remove the majority of the board
29
Q

What must be done if the People with Significant Control (PSC) Change since incorporation?

A

A PSC form must be filed with companies house

30
Q

What are Statutory Books?

What information do they contain?

Where must they be kept?

What part of the IN01 form does this relate to?

A
  1. There are Statutory Books, that a company must keep, containing information on:
         1. Register of Secretaries 
     2. Register of Directors 
     3. Register of Directors Residential Addresses 
     4. Register of Members 
                 5. PSC Register

Companies must register this with companies house on incorporation, and keep their own records unless they elect to have this information solely kept with the central register at companies house

This is Part 6 of the incorporation IN01 Form.

31
Q

What is Part 7 of the IN01 Form?

A

Consent to Act.

The subscribers must make a statement that the proposed company officers (Directors and Company Secretary) have consented to act in their relevant roles.

32
Q

What is Part 8 of the IN01 Form?

A

Statement about individual PSC Particulars

The subscribers must make a statement that the PSCs know their details have been provided as part of the application.

33
Q

What is Part 9 of the IN01 Form?

A

Statement of Compliance

The subscribers must statement that the requirements of the CA as to registration have been complied with.

34
Q

What is the Memorandum of Association?

A

The Memorandum of Association is a statement of intention of the subscribers to form a company and become shareholders, taking at least one share each.

35
Q

What 3 things does the Certificate of Incorporation include?

What is the effect of the COI?

A

A certificate of incorporation will be issued, containing:

  1. The company Name
  2. The company Number
  3. The Date of Incorporation

The Date of incorporation is the company’s birth date, and so contracts cannot be entered into by the company until after the COI has been issued.

36
Q

What 12 things should usually be decided in the first board meeting after incorporating?

A

After incorporation, the first board meeting should be called to make decisions on:

  1. Appointing a Chairperson of the board
  2. Adopting the company seal
  3. Appointing Bankers / Formalising Bank Mandates
  4. Appointing Auditors (if the company needs to file audited accounts)
  5. Fixing an Accounting reference date (The date it must prepare its annual accounts)
    (If a date is not fixed, it will be the last day of the month of incorporation)
  6. Awarding Directors Service Contracts
  7. Authorising use of business / trading name
  8. Allotting Shares and issuing share certificates
  9. Approving the cost of formation
  10. Registering with HMRC For corporation tax, PAYE, national insurance and VAT
  11. Taking out insurances
  12. Calling a general meeting if required (e.g to give directors authority to issue shares etc)

Business Law and Practice (5 decks)

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