Frequently Asked Questions
What are the main advantages of trading as a Limited Company?
Very briefly, the main advantage is that the shareholders, also referred to as members, have no liability to contribute to any debts the Company may incur beyond the total value of their shares. So if things do go wrong, and provided the Company has not been guilty of fraudulent trading, the personal assets of the shareholders and directors are usually safe.
Another useful advantage is that the Company name is immediately protected, as the Registrar of Companies will not allow the registration of another identical Company name. (Please note that Domain Name Registration on the Internet is not automatically protected please ring if you require details).
A limited company is classed as a separate legal entity or "person" and can carry on business quite independently of the other activities of its shareholders or directors.
A Company has a continuity of existence, the shareholders and directors may change, but the Company will continue.
Also, there are usually quite definite tax advantages, but we recommend you ask the advice of a qualified accountant or solicitor before proceeding.
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What is the difference between a Public and Private Company?
Public Companies are able to offer their shares for sale to the public and must have a minimum share capital of £50,000, but in order to commence trading at least one quarter of its nominal share value and the whole of any premium must be paid up. As soon as Companies House is satisfied that this criteria has been met an additional Certificate is issued allowing the Company to commence trading. Private Companies, on the other hand, are prohibited from offering their shares to the public, and the directors are normally empowered to decline to register any share transfers to persons of whom they do not approve. Private Companies need only have a single shareholder, and can commence trading immediately after incorporation.
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What are "Ready made" or 'Shelf" Companies?
All our Ready Made Companies are new limited companies that we have formed using a made up name with a very wide objects clause enabling them to carry on any trade or business. The main advantage of buying a ready made company is that it can be transferred immediately without any delay, the purchaser merely has to choose a name from our varied list, the whole transfer procedure takes no more than a few minutes.
Our standard package includes the Certificate of Incorporation, 4 copies of the Memorandum & Articles of Association, a guarantee that the company has not traded, Minutes of the First Meeting, the Share Transfer and all the new appointment forms, whilst our executive packs include the Luxury loose-leaf Combined Company Register and lightweight Company Seal. They are competitively priced and we generally have a large selection of names to choose from.
Once purchased you can open your company Bank Account and start trading immediately.
These company names can always be changed by us(subject to name availability and approval by the Registrar of Companies) for a nominal fee plus Government Duty.
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How many people need to be involved?
Since April 2008 the new Companies Act requires a minimum of just one person to act as the director of a private limited company. There is no longer any need for private companies to have a company secretary although you can if you want to.
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What forms must be completed?
Included in the package are all the necessary forms appointing the new directors and secretary, transferring the shares, changing the registered office to your office or home address and notifying the Registrar of the new Accounting Reference Date. Once completed these forms will be filed by us with Registrar of Companies and are made up as follows:
- Form 288(a) This form will show the new directors (and secretary if required). A Company can have one director, and no longer needs a secretary.
- Form 287 Every Company must have a registered office address, which is usually an office or home address, but it need not be the trading address.
- Form 88(2) Upon the sale we transfer the one subscriber share using a stock transfer form. This share then comprise the issued share capital and no further issue need ever be made, however, the company has a share capital of £100 (if a shelf company) and all or any part of the remaining 99 shares can be allotted using the form 88(2). In small companies this form is often never used.
- Form G225 This form relates to the Accounting Reference Date, which is the date the Company Accounts will be made up to, it is usually completed by an accountant, and should be filed within 9 months of the incorporation date
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What is the alternative to buying a "Ready Made" Company?
The alternative is to have a company formed in your own choice of name with an objects clause especially tailored to suit your type of business.
Our standard own name formation pack includes the Certificate of Incorporation, 4 copies of the Memorandum and Articles of Association, (which are the objects and regulations governing the Company), Minutes of First Meeting, Share Transfer and all necessary company forms. A lightweight Company Seal and Luxury loose-leaf Combined Company Register are included in our Executive company pack.
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What information is needed to proceed with formation?
We need to know the exact Company name you want and the nominal share capital you wish the Company to be registered with, usually this is in the range of £100 to £100,000 or more, but can be any amount and does not affect the cost of formation.
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Can any name be registered?
No. Briefly, if a name is already registered, or contains words that are classified as "sensitive" by the Registrar of Companies, then the name will not be allowed. Our staff are always available to help and advise on name availability. We must also point out that the Registrar of Companies does not consult the Trade Marks Index when considering new company names and the acceptance of a name does not indicate that no trade marks rights exist in it. We can advise you whether we feel it necessary for a Trade Mark Search to be made.
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What happens when you have all this information?
We draft a suitable Memorandum and Articles of Association, and provide the subscriber to the Memorandum and Articles and the first director and secretary (these positions are taken for incorporation purposes only and resignations are presented immediately after incorporation). We arrange for the named director to Swear on Oath before a Commissioner for Oaths that the Company has been formed in Compliance with the current Companies Act and then lodge all necessary pre incorporation papers with the Registrar.
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Are there any forms to be completed before incorporation?
No, not until after incorporation, as we provide the first director and secretary who complete all the pre incorporation documents.
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How many people are required to form the Company?
There is a minimum requirement of two people, one can be a director and the other the company secretary, or both can be directors and one can also act as the company secretary.
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How long before the Company Name can be used?
You cannot use the name until the Registrar issues the Certificate of Incorporation, normally 7 - 10 days after we lodge the papers, but this can vary and you will be advised of the expected delay when you instruct us to proceed.
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Can a Bank Account and printing etc. be arranged before incorporation?
Your Bank will not normally open an Account until they have seen the Certificate of Incorporation and we must advise you not to proceed with any printing or signwork until the Certificate has been issued.
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What happens when the Certificate of Incorporation is issued?
Companies House will send it direct to ourselves and we then prepare your company pack and either post it or advise you that it is ready for collection. Included in the pack are the following forms which will need to be completed:
- Form 288(a) This form will show the new directors and secretary. A Company can have one director, but a sole director cannot also be the secretary.
- Form 287 Every Company must have a registered office address, which is usually an office or home address, but it need not be the trading address. Many clients prefer to use our London office as their registered office address for which we charge £30.00 + VAT for the first year(if ordered with a limited company) and then £50.00 + VAT thereafter.
- Form 88(2) This form is only used if you wish to issue all or any of the remaining 98 shares. The 2 subscriber shares are transferred on two stock transfer forms (which are retained by you) and these two shares are not shown on the form 88(2).
- Form G224 This form relates to the Accounting Reference Date (the date your company Accounts will be made up to), which is initially set by Companies House as 12 months from the last day of the month of incorporation, and is usually completed by an accountant.
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After incorporation can trading commence?
Yes, a private limited company can begin immediately, but you must remember that VAT registration is not automatic, if you wish to register you must contact your local VAT Office.
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What happens when changes occur?
You must notify Companies House of any changes in the directors or secretary (forms G288) within 14 days of the change, this also applies to changes in the registered office address (form G287), Any changes in shareholdings due to transfers are only shown on the following Annual Return and are not required to be filed separately, whereas any new allotments must be registered within one month of the allotment date on a form G88(2).
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When do Annual Returns and Accounts have to be filed?
Annual Returns and Accounts must be filed each year, the exception being that the company need not file an Annual Return in the year of its incorporation. Normally the Annual Return would be made up to a date 12 months after the incorporation date and is sent direct to the Registered Office by Companies House. Accounts must be filed each year, even if the company is not trading, or a penalty is imposed by Companies House. Private companies are allowed 9 months from their year end to file their Accounts.
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