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Frequently Asked Questions Vistra UK

1. Is there more than one type of company?

2. Who can form a company?

3. Can I choose any name I want for my company?

4. What is a Registered Office?

5. What officers does a company require?

6. Who can be appointed as a Director?

7. What are the Articles of Association and the Memorandum of Association of a private limited company?

8. What is share capital?

9. What is the accounting reference date?

10. What forms do I need to complete?

11. Do I need a company seal?

12. What information do I need on company stationery?

13. What is a Limited Liability Partnership?

14. Why form an LLP?

15. Who can set up an LLP?

16. What is an Offshore formation?

17. What is a Guarantee Company?

18. What is a Flat (or Residents) Management Company?

19. Why form a Flat (or Residents) Management Company?

20. What is a Right to Manage (RTM) Company?

21. What is a Public Limited Company(PLC)?

22. What is an Unlimited Company?

23. Why form an Unlimited Company?


1. Is there more than one type of company?

Yes, there are four main types of company:

Private company limited by shares - members' liability is limited to the amount unpaid on shares they hold. A private company limited by shares cannot offer its shares for sale to the general public

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. This type of company must have an authorised share capital of at least £50,000 (or its equivalent in another currency) at the time of incorporation.

2. Who can form a company?

The Companies Act 2006 allows a private limited company to be formed for any lawful purpose with one subscriber to the memorandum of association.

3. Can I choose any name I want for my company?

No. There are some restrictions imposed on the acceptability of a name. You may be required to produce supporting documentation if the name of the company includes words such as "veterinary", "nurse", "dental" or similar. It is important to ensure the name you want to use is available and is acceptable to Companies House before you complete any company registration procedures. Vistra UK offers a name check service for new company formations.

4. What is a Registered Office?

It is the official address of a company to which all correspondence relating to the company will be addressed e.g. Companies House letters and reminders, Inland Revenue returns and other notifications. The registered office can be anywhere in England and Wales, (or Scotland if your company is registered there). To avoid delays it is important to make sure that all correspondence and notices sent to this address are dealt with promptly. Any change of a company's registered office address must be approved by the directors and notified to Companies House.

5. What officers does a company require?

Every incorporated company must have a formally appointed Director and may have a Company Secretary. A private company should have at least one director who can  also be the company secretary (and subscriber). A public company must have at least two directors and one secretary (formally qualified).

6. Who can be appointed as a Director?

In general terms there are few restrictions on being a Director and these are covered in the Companies Act and related legislation. Reasons for not being appointed include the age of the Director, bankruptcy and disqualification. The minimum age of a Director is 16 years.

7.What are the Articles of Association and the Memorandum of Association of a private limited company?

The Memorandum of Association sets out the company's name and subscribers.  It is a historical document which cannot be amended.

The Articles of Association set out objects of the Company (if any) and the liability of the members whether limited by guarantee or by shares.  It also contains the rules for the internal governance of the company, such as rights attaching to the shares and the proceedings of directors. These are a standard set of Articles drafted in accordance with The Companies Act 2006 by the Association of Company Registration Agents (ACRA). The majority of newly incorporated companies use these Articles. Vistra UK is able to adapt the Articles of Association for your company's particular needs.

The Articles of Association of specialist companies like Guarantee Companies, Property Management and Public Limited Companies drafted by ACRA or other organisations are also available.

8. What is share capital?

Having decided to form a company limited by shares, the person or Persons forming it decide on the amount of shares the company will issue. An authorised share capital is only required where the company decides to have more than one class of share and/or where the shares are divided into different denominations. Companies with one class of share need not restrict the amount of shares to be issued but may if they so desire.

The Subscriber must agree to take at least one share when the company is registered. The Memorandum of Association must show the names of the people who have agreed to own shares. These people are called the subscribers.

9. What is the accounting reference date?

This is the date in each year to which accounts will be drawn up. The date depends on the date of incorporation as it is the last day of the month in which the anniversary of incorporation falls. For example, if your company is incorporated on 2 July this year, the accounting reference date will be 31 July, and its first financial year must end on 31 July next year (or within seven days of that date).

10. What forms do I need to complete?

Our e-formation service makes the process of forming a company even easier and quicker.  You simply select the type of company required and complete the relevant details.

With the e-formation service we send you an emailed copy of your Certificate of Incorporation and the Memorandum of Articles within 24 hours of receiving your formation instructions. A copy of the Certificate will follow by post. It’s as simple as that!

11. Do I need a company seal?

The Companies Act 2006, does not require a company to have a seal.  However, companies may have a seal to use on important documents like mortgages, conveyances, and share certificates.

12. What information do I need on company stationery?

  • Your company name, exactly as registered at Companies House
  • The registered office address
  • The country in which the company is registered (England & Wales, Wales, Northern Ireland or Scotland)
  • The company number allocated by Companies House (shown on your Certificate of Incorporation)
  • The Company may either show either all the directors or none at all.
  • If registered, your VAT number

13. What is a Limited Liability Partnership (LLP)?

A registered legal entity offering the benefits of limited liability while retaining the advantages of a partnership, including its treatment for taxation purposes. While the LLP is similar to a limited company for filing purposes, the LLP uses an Agreement (which is not filed) instead of the Memorandum and Articles of  Association.

14. Why form an LLP?

This type of entity gives the benefits of limited liability whilst allowing its members the flexibility of organising their internal structure as a traditional partnership. LLPs are treated as partnerships for tax purposes.

15. Who can set up an LLP?

Two or more designated persons can set up an LLP. Designated members are members who have the additional responsibility for signing and filing the annual accounts, the confirmation statement (formerly annual return) and providing other financial information as required by Companies House or prior to dissolution. There is no limit on the number of non-designated persons.

16. What is an Offshore formation?

Companies can be formed in various offshore jurisdictions to provide tax advantages and privacy to conduct business. Vistra UK offers incorporations and ready- made companies in a variety of jurisdictions including the Bahamas, British Virgin Islands, Jersey and Guernsey.

17. What is a Guarantee Company?

A company limited by guarantee and not by its shares. Often used by professional associations (not for profit), charities, clubs and for management of property e.g. (right to manage (RTM) or general property management).

18. What is a Property (or Residents) Management Company?

A company designed to manage, administer and own a freehold or leasehold property which has been divided into separate dwellings.

19. Why form a Flat (or Residents) Management Company?

This type of company allows greater opportunity for tenants to exercise their rights in relation to their property.

20. What is a Right to Manage (RTM) Company?

A change in the legislation contained in the Commonhold and Leasehold Reform Act 2002 came into force on 30th September 2003. The RTM company provides tenants with the right to take over the collective management of their property including activities such as maintenance services and the general upkeep of the building. It allows greater opportunity to exercise residents rights than the Flat Management Company.

21.What is a Public Limited Company(PLC)?

A company which is limited by shares which can be offered for sale to the public. In order for such company to trade, it must have a minimum issued share capital of at least £50,000 with one quarter (£12,500) paid. For incorporation purposes it may simply issue one share and allot further shares when applying for a trading certificate.

22. What is an Unlimited Company?

A company where the members are fully liable for the debts of the company upon liquidation and there is no limit to the members’ liability.

23. Why form an Unlimited Company?

There is no need to file accounts with the Registrar at Companies House as members are liable for company funds and debts themselves so there is no need for public access to financial statements. However, in certain cases, where such companies are subsidiary /holding companies or banking and insurance companies then they may need to file accounts.  The owners of the company may enjoy the advantages of these preferential filing requirements. These companies are often used when owners wish to benefit from corporate taxation regulations.

 

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