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FAQs
Company setup
What is a memorandum of association?
A Memorandum of Association is a document
setting out the essentials of a company, which include the
name of the company, the location or address of the
registered office and the objectives of the company once it
starts its activities.
What are the articles of association?
The Articles of Association is rightly termed
as the constitution of the company being formed or existing.
This document sets out the policies, rules and regulations
that will be followed to pursue the internal and external
goals of the company as an organisation. the company may
adopt the contents of Table A in entirety or partially, as
it suits the purpose of the organisation and its goals.
What is the minimum investment required for a
limited liability company?
The Companies House requires a minimum of
£50,000 worth of Authorised Share Capital in a public
limited company (plc). The company may however issue any
number of shares up to the total value of the authorised
shares until further required. A private limited company may
initiate with a lower share capital but should be sufficient
to fund certain projects and acquisitions before they feel
the need to raise more capital.
How is a company name selected?
A company can only be registered once it
passes the minimum requirement. All names must be an
alignment with the legislation governing the selection of
company names, namely the Companies Act and the Business
Names Act. Furthermore, the name should then be checked for
existence in the Company Names Index. If the Index does not
contain the proposed name, an application may be filed to
register the name for your company.
Do I
have to fill in any registration forms before I start my
business?
No, you do
not have to fill and send any registration forms to
Companies House. Since you are registering via our online
company formation service, your information will be
processed electronically and sent to Companies House
directly, and update your records.
What should be printed on company stationery?
The company
stationery, including the letterhead, should contain the
company’s official name, as registered with Companies House;
the company’s registered office address; the registration
number or license number; the VAT registration number (if
any); and the place of registration, i.e. England & Wales or
Scotland.
What should the company do if another
business is being operated under its name or similar to its
name?
Where there is a dispute over the registered
name of the company with another company, the matter must be
settled in the court of law, as required by the Companies
Act. The Registrar of Companies does not handle such matters
and any conflicts must be resolved legally.
Where a company is believed to have a similar
name to that of another, the matter can be discussed with
the Secretary of State. The secretary will investigate the
issue and may require or direct one of the companies to
consider another suitable name for its business, if it finds
in the favour of the other.
Directors and secretaries
When does a company require a director and/or
secretary to be appointed?
A director is elected by the shareholders to
manage the affairs of the company. The company director may
be an individual person who leads the company or be a member
of the Board of Directors, which is appointed by the
shareholders.
A secretary acts in the capacity of the
administrator of the company, and is subordinate to the
director or board of directors. The secretary can be a joint
director but a sole director cannot hold both positions at
the same time.
What is the eligibility criteria for
directors and secretaries?
To stand for election as a director the
candidate must fulfil three conditions to qualify. The
candidate
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must be an adult and capable of dispensing
his/her responsibilities;
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must not be disqualified by a court for holding any
position in the future, except where a leave has been
granted in specific circumstances; and
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must not be an undischarged bankrupt and
restricted by a court order from holding the position,
except where leave has been granted.
The prospective candidate for the position of
a company secretary should be at least one of the following
to qualify. The candidate must
-
be a member of a professional accountancy
body of the
United Kingdom; or
-
have held the office of secretary or deputy
secretary previously, either within the organisation or in
another company; or
-
be a barrister, advocate or solicitor
practicing in the
United Kingdom.
If the directors believe that the candidate
has sound knowledge and experience for the proposed
functions, and/or is a member of another professional body
that the directors find acceptable for the position, they
may appoint the candidate.
Who is responsible to ensure compliance with
company regulations?
Companies House requires directors to ensure
that statutory documents are dispatched to the Registrar
within the dates announced. These documents include
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Annual accounts and returns;
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Notices of any change in the company
directors and secretaries or any modifications in the
records of existing directors and secretaries; and
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Notice of a change to the address of the
registered office.
A company secretary has no specific duties as
far as the legislation is concerned but is required to
administer the company and maintain appropriate
documentation of all its proceedings. These include
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Filing of documentation with Companies
House
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Issuing notices for meetings to auditors
and shareholders
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Supplying copies of all company meetings
held with shareholders, the board of directors,
resolutions passed at AGMs and extra-ordinary meetings
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Supplying copies of annual account to all
relevant individuals, groups and organisations
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Recording the minutes of AGMs and meetings
of board of directors
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Permitting access to all company documents
and records to concerned persons
The secretary is also responsible for the
custody and use of the company seal, although companies are
no longer required to use an official seal.
Documentation
What are the essential documents that a
company is required to maintain?
Companies are required to produce annual
financial statements and returns and submit them to
Companies House within the stipulated time frame. In
addition, the company secretary is required to submit copies
of all registers maintained with the company.
What are the contents of the annual accounts
or financial statements?
A limited company is required to file a set
of financial statements or accounts annually to Companies
House. The set of documents includes
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A profit and loss account (income
statement) or a statement of income and expenditure;
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A balance sheet signed by the director;
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An auditors’ report on the company’s
performance;
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A directors’ report, signed by the company
director or secretary;
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Notes to the financial statements; and
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Group accounts (where appropriate)
Are all companies required to submit their
annual accounts?
All private and public limited companies are
required to submit their accounts to the Registrar of
Companies. Unlimited companies are not required to file
their statements provided they have been part of a group of
companies, or are a bank or insurance company.
What are annual returns?
An annual return is a summary of the
information about the company and its directors,
secretaries, registered office address, shareholders and the
share capital. A company is required to fill Form 363a with
the following information in a comprehensive manner.
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The name
-
The registration number
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Private or public company
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The
registered office address
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The address or location of company
registers
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The main or principal business activity of
the company
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The name and address of the company
secretaries
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The name, residential address, date of
birth, nationality and the business occupation of all
directors of the company
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The made-up date of returns
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The nominal value of the total issued share
capital
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The names and addresses of the
shareholders, the number of shares held and the type held
by each shareholder
When is an annual return due at Companies
House?
Companies Issue sends you the Form 363a
(shuttle and regular) two weeks prior to the date you are
required to file it, i.e. the made-up date. This will be
based on the made-up date, which is usually the anniversary
of
The annual return must be filed at Companies
House within 28 days of the made-up date as mentioned on the
form.
What information is required regarding
shareholders and share capital?
The shuttle return form contains pre-printed
information relevant to the company’s share capital. If
there has been a change in the structure during the
financial year, the information must be written on the form
where required to update the Companies Register. The
information should mention:
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The name and the class of each type of
share issued or authorised, e.g. ordinary shares,
preference shares etc.
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The total number of shares issued to the
shareholders as at the made-up date of the annual return
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The total nominal or face value (excluding
any calculations of premiums or discounts on each share
issued) of the issued shares of the class as at the
made-up date of the annual return
Where the information in Form 363a is
incorrect, one or more other forms may be required to be
filled and sent over to Companies House.
What is the Accounting Reference Date (ARD)?
The ARD is the financial year-end, according
to which all financial statements are prepared. If the
company’s date of closure were moved to another date,
Companies House must be informed promptly to avoid any
unfavourable incident for the company. The accounts must be
submitted before the deadline, which is set based on the
company’s ARD.
Can the filing dates be extended?
The filing or deliver dates of the accounts
can be extended in special circumstances where the reason
has been defined and approved by Companies House. For this,
Form 244 must be filled and delivered before the normal
filing date and must be done individually for each financial
year in question.
An application can also be submitted to the
Secretary of State for Trade and Industry for an extension
in the delivery date, where some unforeseen circumstances
may have taken place such as those that were beyond the
control of the company’s personnel and the auditors.
Where the deadlines have been breached, the
company is automatically charged for a civil penalty for
late filing. The amount fined, however depends on whether
the company is private or public. Failure to deliver in
specified period is also a criminal offence for which the
directors of the company may be prosecuted.
Are there any consequences for a delay in
filing the documents?
If a director fails to supply the above
documentation within the time limit, s/he may be prosecuted,
as it is a criminal offence to delay or avoid the filing of
records. If the Registrar believes that the company is no
longer carrying on its business, the name could be struck
off the register and dissolved.
Does a dormant company have any obligations
for filing any documents?
A dormant company is required to submit its
set of accounts and returns annually to Companies House,
despite the fact that it is not engaged in any form of
business activity. The dormant company is given leave from
preparing a full-length set of accounts and may present
brief but acceptable financial statements, that are not
necessarily audited.
Value added tax
When should a company register for Value
Added Tax?
A company should register with HM Customs and
Excise for Value Added Tax (VAT) once its annual sales
revenue of normal standard goods reach the £54,000
benchmark. The HMCE requires a company to register for VAT
if it expects the total sales revenue for the year including
the proceeding month should equate or go beyond the
threshold. Companies may voluntarily register for VAT if
they wish to gain relief on input tax on the products and/or
services they purchase from VAT registered suppliers.
When is VAT due?
Value Added Tax is payable to HM Customs &
Excise in quarterly instalments after calculating the net
VAT payable. The net VAT is calculated by deducting the
input tax from the output tax of all products and/or
services sold. The instalments are due by the 10th of April,
July, October and January for the revenue of the preceding
3-month period.
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