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Finnies can provide expert advice on forming a limited company. Here are some of the issues to consider...
Although you can set up a company using your own resources, it is normally advisable to use a specialist formation agent. You first need to decide on the following:
The Companies Act 2006 sets out exactly what documentation is required for forming a company, and it is very different from that which was previously needed.
An application to form a company is made on Form IN01. This has to be accompanied by a Memorandum of Association (see below), the Articles and the correct registration fee.
The Memorandum of Association is a short document, serving the limited purpose of evidencing the intention of each subscriber to form a company and become a member of that company. Companies are no longer required to specify their objects, and the concept of authorised share capital has been abolished.
New Model Articles have been introduced. There are three types, as follows:
They are written in plain English and are shorter and simpler than 'Table A' (which had been around in various forms for over 150 years). In practice, companies can be formed using either Model Articles, Model Articles with amended provisions, or bespoke Articles.
Companies incorporating as limited by shares (whether private or public) must complete a statement of capital and initial shareholdings as part of the formation documentation. The statement of capital is a new document. It is a ‘snapshot’ of a limited company’s issued share capital at a given time. It also needs to be provided in various other circumstances, including as part of the application to incorporate.
A company must have at least one director who is a natural person aged 16 years or over. For each director who is an individual, the following information must be provided:
The following information must be provided in relation to each shareholder:
Details of people with significant control will also need to be provided, for example anyone with more than 25% share or voting rights.
Directors (and company secretaries where applicable) of both existing and new companies now have the right to set out a service address rather than their usual residential address. The service address may be the company’s registered office.
Individual companies have to maintain two registers of directors – one containing, amongst other things, a service address for each director, and a further register containing the residential address of each director (protected information).
Home addresses are no longer put on public record by the Registrar of companies. Companies House still hold a register of residential addresses, but access will be very strictly limited (e.g. liquidators, the police, HM Revenue & Customs and credit reference agencies). If no action is taken, the residential address will automatically become the service address until the information is provided in the next confirmation statement (this replaced the annual return from 30 June 2016).
If formation agents have been involved, they will normally provide copies of the relevant documents, together with suggested minutes for the directors’ meeting, a form AA01(change of accounting reference date) and forms SH01. They usually also supply the Statutory Book - a combined register, and minute book (in loose leaf or bound form), and some blank share certificates.
Once you receive the Certificate of Incorporation, you should hold a first meeting of directors to deal with the following matters:
A first general meeting of the company is required:
After the first board and general meeting, you should make the following returns to the Registrar of Companies:
If you are considering forming a limited company, contact the team at Finnies for advice and assistance.
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