TYPE OF COMPANY
There are four main types of company that carry on Business in United Kingdom:
- Private company limited by shares-members' liability is limited to the amount unpaid on shares they hold.
- Private company limited by guarantee-members' liability is limited to the amount they have agreed to contribute to the company's assets if it is wound up.
- Private unlimited company- there is no limit to the members' liability.
Public limited company (PLC)- the company's shares may be offered for sale to the general public and members' liability is limited to the amount unpaid on shares held by them.
Companies House is responsible for company registration in Great Britain.
It also has a key role in providing information about British companies.
A company wishing to register with the Registrar of Companies must:
- give details of its constitution in the form of a Memorandum and Articles of Association
- give details of its directors, company secretary and members.
- have a registered office.
- These documents are often prepared by private sector formation agents, but there is no requirement in law to use an agent.
- A new company comes into existence when the Registrar of Companies issues a certificate of incorporation.
- The Companies Act generally allows one or more persons to form a company for any lawful purpose by subscribing to its memorandum of association.
A public company or an unlimited company must have at least two subscribers to its Memorandum of Association.
Company name checks
- The first step in registering a company is to check for the suitable Company name in which the company wishes to do business. For which a search may be conducted at the Registrar office.
- The name may not be allowed by the registrar if:
- A company is already a same name exists in the registry
- the use of certain words is restricted; and
- names likely to cause offence are not allowed.
- If the chosen name is resemble another name, an objection could be made within the 12 months following the incorporation of company and the Secretary of State may direct the company so incorporated to change the company's name.
- Immediately after obtaining the name to incorporate a company it is required to send the following documents, together with the registration fee to the Registrar of Companies:
- A memorandum of association
- Articles of association
- Form 10: gives details of the first director(s), secretary and the intended address of the registered office. As well as their names and addresses, the company's directors must give their date of birth, occupation and details of other directorships they have held within the last five years. Each officer appointed and each subscriber (or their agent) must sign and date the form.
Form 12: is a statutory declaration of compliance with all the legal requirements relating to the incorporation of a company. It must be signed by a solicitor who is forming the company, or by one of the people named as a director or company secretary on Form 10. It must be signed in the presence of a commissioner for oaths, a notary public, a justice of the peace or a solicitor.
MEMORANDUM OF ASSOCIATION
This memorandum of association shall contain
- the name of the company,
- Address of the registered office of the company is situated (in England, Wales or Scotland); and
- its objects: the object of a company may simply be to carry on business as a general commercial company.
- Name and addresses of the directors of the company
Other clauses to be included in the memorandum depend on the type of company being incorporated.
ARTICLES OF ASSOCIATION
- This document sets out the rules for the running of the company's internal affairs.
- Model articles are provided in the Tables mentioned above.
- A company may adopt the whole of Table A as its articles or any part of it.
- A company limited by shares which has adopted the whole of Table A without modification does not need to deliver a copy for registration.
- If Table A is adopted with modifications, it must deliver the articles for registration.
- All companies that are limited by guarantee or unlimited must register articles. These should be in accordance with, or as near to that form as circumstances permit, the following tables:
- Company limited by guarantee without share capital Table C
- Unlimited company with share capital Table E
- The company's articles delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.
The form of memorandum and articles of association for each type of company is set out in a set of tables called The Companies (Tables A to F) Regulations, 1985.
MINIMUM NUMBER OF OFFICERS
A private company must have at least:
- one director- but the company's articles of association may require more than one.
one secretary- formal qualifications are not required. A company's sole director cannot also be the company secretary.
A public company must have at least:
- two directors;
one secretary- formally qualified,
After incorporation, Companies House shall be intimated about:
- the appointment of a new officer;
- an officer's resignation from the company;
changes in an officer's name or address or any of the other details originally registered on Form 10
The incorporation process normally takes 5 working days and costs Â£20. A same-day company incorporation service is also available for an additional fee, if they are hand delivered before 3pm.
Public limited companies
A public limited company is a company which is registered as such and complies with the following:
- It must state that it is a public limited company both in its memorandum and in its name.
- The memorandum must contain a clause stating that it is a public limited company and the name must end with 'Public Limited Company' or 'PLC' (or if it is a Welsh company, the Welsh equivalents 'Cwmni Cyfyngedig Cyhoeddus' or 'CCC').
- The memorandum must be in the form specified in Table F of the Tables or as near as possible to that form.
- It must have an authorised share capital of at least Â£50,000.
- Before it can start business, it must have allotted shares to the value of at least Â£50,000. A quarter of them, Â£12,500, must be paid up. Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium.
- A newly formed PLC must not begin business or exercise any borrowing powers until it has a certificate issued under section 117 of the Companies Act 1985 confirming that the company has issued share capital of at least the statutory minimum.
- Once issued, the certificate is proof that the company is entitled to do business and borrow.
- However there are four main restrictions:
- A PLC must have at least two members and at least two company directors. The secretary (or each joint secretary) must also be a person who appears to the directors to have the necessary knowledge and ability to fulfil the functions.
- A PLC normally has only seven months after the end of its accounting reference period to deliver its accounts to the Registrar.
- A PLC cannot take advantage of many of the provisions and exceptions applying to private companies under the Act, such as audit exemptions for small private companies.
A PLC cannot apply for voluntary strike-off under section 652A, Companies Act 1985.
For companies incorporated in England & Wales:
The Registrar of Companies
Cardiff CF14 3UZ
For companies incorporated in Scotland:
The Registrar of Companies
37 Castle Terrace
Edinburgh EH1 2EB
DX ED235 Edinburgh 1