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#10115 - Setting Up A Company - Business Law and Practice

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Forming a New Company

The birth of a Co takes place, in accordance with s. 7 of the CA 2006 by a process known as Registration (AKA Incorporation). Registration/Incorporation involves preparing a number of docs and delivering them toe the Registrar of Companies at Companies House (“CH”):

  1. An application for registration/incorporation (Form IN01 required for paper registration, e registration = e-form)

  2. A fee

  3. Copy of articles of association for the company

  4. A Memorandum of association

Docs must be delivered to CH either in electronic form, in paper form, in person or by post. The Registrar will consider the Docs and if it is satisfied that the requirements of the CA 2006 are met, it will register the Docs and issue a Certificate of Incorporation for the Co. The date on the certificate is the date the Co comes into existence.
Contracts BEFORE Incorporation

  • Contracts entered into by “promoters” (solicitors are not) on its behalf before formal incorporation:

    • Are not binding on the company

    • Are binding on the individual (s.51)

  • For the contract to bind the company, the D must enter into a novation agreement between him, the company and the 3rd P.

Send to Companies House:

ss.7-10 & ss.12-13 sets out the documents needed for incorcorpation

  1. Form IN01/ e-form Applic. for Regis. (AR)(AR is required by s9(1) of CA 2006) and it must contain:

    1. The type of Co being registered (s.9(2)(c) and (d)) i.e. Public or private, Ltd or UnLtd etc.

T&F NOTE the name ofa private limited company must always end in "limited" or "ltd.". If it is to be a Welsh company the name can end with theWelsh equivalents "cyfyngedig" or "cyf."

  1. The Company’s proposed name (s.9(2)(a)) (See Changing Co.’s Name Chart)

  2. The Address (including Country) of the Co.’s Registered Office (s.9(2)(b))

  3. A Statement of capital and initial shareholdings (s.9(4))

    1. There can be one member (s.7(1))

  4. A Statement of Co.’s proposed officers (s.9(4)(c))

    1. Name, address, residence, nationality, business occupation, date of birth

    2. Public Co.’s must have 2 Directors (s.154(2))

    3. Private must have 1 Director (s.154(1))

  5. A Statement of compliance (s.9(1) and s.13)

  1. With the requisite fee

  2. Copy of your special articles (s.20(1)(b)) or else the MA will automatically apply (legal status of binding contract) (See Changing Co.’s Articles of Association Chart)

  3. Memorandum of Association which states the first members’:

    1. Intent to form a company

    2. Agree for members to take one share each (s.8); the first shareholders are ‘subscribers to the memo’
Get back from Companies House

  1. Certificate of incorporation (s.15(1)) issued by the Registrar which is evidence of company’s existence and states:

    1. Name and registered number

    2. Date of incorporation

    3. Location of RO

    4. Limited/unlimited liability by shares/guarantee

  • With effect from date of incorporation, the subscribers become the holders of the shares in statement of capital (s.16(1)) and the directors become the directors, limited liability protection begins and it is capable of exercising the legal functions of a company (s.16(5))
Organise

  • Write up company records when receive back certificate (s.1134)

  • Change the accounting reference date if necessary, because the default will be the last day in the month of incorporation (s.391(4))

  • Appoint auditors

  • Optionally elect a chairman

  • Take out insurance in the company’s name

  • Advertise notice of company name at RO / place of business, etc.

  • Order stationary giving details of the company name, etc.

Memorandum of Association

  • Identify the proposed first shareholders

  • Identify the number of shares they are to take each

Table A Articles

  • If no bespoke Articles are submitted, then the Table A Articles will automatically apply

  • Those unamended or not included in the bespoke Articles, then Table A will still apply

Send to Companies House

  • Form 10: sets out details of the proposed first directors and company secretary and the address of the company’s registered office in England or Wales & Form 12: declaration that the incorporation requirements are satisfied

Get from Companies House

  • Declaration that the incorporation requirements have been satisfied

  • Businesses known as ‘company formation agents’ incorporate them with the standard Articles

  • They are then ready to purchase “off the shelf” to then trade

  • It is a quick and easy way of obtaining a new company

  • The first directors and shareholders are the company formation agents

  • It is much quicker than doing it yourself

  • Frequent items that need to be completed on purchasing a shelf company (example) – see procedure on ‘personalising a shelf company’:

    • The...

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