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Documents - Explained

 

Certificate of Incorporation Memorandum of Association Articles of Association Form 88(2) Form 225 Stock Transfer Form(s) Form 288(a) First Board Meeting Minutes   Certificate of Incorporation It is only when the Registrar with whom documents are filedare filed issues this certificate that the Company is in existence. any agreements, whether written or otherwise made on behalf of the Company prior to its existence will be voidable and any person making a `pre-incorporation agreement' will be personally liable on that agreement even following incorporation. The Certificate states a unique registration number which will stay constant with the Company (even if the Company changes its name) until its dissolution. There is no legal requirement that the Certificate be displayed at the business address but it is good practice (if it is not to be displayed) to keep it with the company registers at the registered office. In the normal course the only occasion when the Certificate will be required is to open a bank account and a certified copy will be retained by the bank together with a copy of the memorandum and articles of association   Memorandum of Association   The Memorandum has five clauses and these are: The Name - There is a difference between the Company Name which is the name registered at Companies House and the business name which although generally the same may be a trading name or style (e.g. ABC Limited trading as Bloggs Florist). A company name has to be chosen carefully to avoid infringing the rights of established businesses and to see that it complies with the requirements of the Companies Acts. It may also be advisable to register the proposed name as a domain name for use on the internet; Domicile - This states the geographical location of the Registered Office address (i.e. England & Wales or Scotland) and determines which Registrar has jurisdiction over the Company. Once the Domicile has been chosen it cannot be changed nor can documents due for filing at one Registrars be filed at the other; Objects - This is a statement of the objectives of the Company and is, when incorporating a company through Companies UK Limited, a general trading set of objectives which provides that that the Company can undertake any activity. In the event that the company wishes to change its objects clause a special resolution of its shareholders can be filed detailing the proposed changes; Statement of Liability - It is the liability of the shareholders that is limited and not that of the Company and in the event that the company is wound up the shareholders are bound to contribute and amount equal to the unpaid element of shares. If then 100 shares have been issued, of which £2 has been paid up then £98 would become due and payable on a winding up. The liability would in this case be £98, if however all of the shares in issue had been paid for then the liability of that member would be nil; Authorised Share Capital - This should be sufficient to enable the Company to sell shares to raise money it needs to carry on business in the future. The fact that a company may have a £10,000 authorised share capital does not mean that it is obliged to issue and pay for all of the shares, many small private companies operate with only one or two shares regardless of its financial requirements (one share is now the minimum required under the Companies Act). It is best to regard a £10,000 authorised share capital as 10,000 shares which are available for a company to issue   Articles of Association   The Articles of Association (and Table A) are effectively its rules and regulations and fix the manner in which the directors and the shareholders of a company are to act, both among themselves and in relation to each other. Of course certain matters are regulated by the Companies Act and so are not specifically referred to in the Articles. Table A (which is provided separately is technically a model set of articles but as they are widely drawn it would not be appropriate for most companies to subscribe to them all, they will want to make alterations and additions to suit their needs. A company may alter its articles, or adopt a whole new set, by special resolution of the shareholders. A copy of the altered or new articles must be delivered to the Registrar of Companies within 15 days of their adoption. The most common alteration made to the articles relates to the share transfer provisions by removing the rights of the shareholders to freely transfer their shares and providing instead that shares must be sold/transferred to the remaining shareholders on a pro-rata basis, thereby allowing the remaining shareholders to keep control of the Company. Such a provision is referred to as `Pre-emption Provisions'   Form 88(2)   Unless otherwise instructed there are at present (within documentation produced by this company) two issued shares in the capital of the company and these shares will already have been transferred using the stock transfer form. Two shares are in many cases sufficient when it is a single member/director company as this will represent 100% of the issued share capital, however where there is more than one member (say perhaps three of four) then it is often prudent to issue at least 100 shares as it is far easier to determine percentage holdings. A point to note is that although stamp duty of 5% is payable to the Inland Revenue Stamp Office on share transfers, no such duty is payable on share allotments. To issue further shares (over and above the two subscriber shares) using form 88(2) insert name of the company and registered number and then continue as follows: (a) Number of Shares (98) - (assuming that you require, for eaxample, 100 issued shares in total) (b) Nominal Value of each - (£1) (c) Total amount (if any) due and payable - (£1) (d) and (e) (ignore these sections unless shares are to be issued otherwise than for cash) On the reverse of the form insert name(s) and address(es) and insert number of shares in the first column under the heading `Number of Shares Allotted. Ensure that the form is signed and dated and then forward to Companies House, the addresses of which appear at the end of the form ** There may be other legal considerations when issuing further shares and if you are unsure whether they will apply please email us at info@domainscape.co.uk before issuing shares giving a brief statement of the proposed transactions, you will be contacted by return with advice on how to proceed   Form 225   This form is used for determining a company's accounting reference date (of the accounts year end). It is set automatically depending on the date of incorporation and so for example if the date of incorporation is 14th August 2003 then the default accounting reference date is the anniversary of the last day of that month, in this case 31st August 2004. Should you wish to alter the default date you are permitted to do so once in every five years using form 225. When completing the form remember to state whether the date is to be extended beyond the default date or shortened from it. As a guide when shortening the date the shortest possible accounting period following incorporation (or the last accounting date) is six months and when extending the date it is possible to extend it to eighteen months following the incorporation date (or the last accounting date). A period of 10 months following the accounting reference date is permitted in which to file the accounts of the Company (private limited companies only) although it must be remembered that the greatest period of time permitted to file accounts following incorporation is 22 months   Stock Transfer Form(s)   Using the electronic filing service there is no need to issue transfer forms as the two subscriber shares (shares already in existence following the transfer of the Company) are taken from the outset by the intended shareholders. There will be occasions where shares may be later transferred and in therse situations a Stock Transfer Form will need to be completed are transferred using the stock transfer form. There is a requirement that transfer forms be forwarded to the nearest Inland Revenue Stamp Office for stamping, the rate applicable to the transaction is £5.00 per £100 of shares transferred. The amount payable therefore when two shares are transferred to one person is £5.00 and when transferring to two persons the rate is £10.00. Cheques or Postal Orders can be used to effect payment (stamps may not be used)   Form(s) 288(a)   Forms 288(a) are used to appoint a director or secretary to a company. A PDF version of this form can be obtained at www.domainscape.co.uk/documents.htm and once completed this can be fowarded for filing at Companies House. Alternatively this form can be lodged electronically with Companies House (please visit https://ewf.companieshouse.gov.uk for more details). As we use electronic company formation there is no need to complete forms 288(a) on registration as the director(s) and secretary details are completed on application. The added advantage of this is that there are no delays in opening a bank account as information relating to the officers is already held on file   Board Meeting Minutes   The purpose of these minutes is to identify what has happened following the legal transfer of the Company, apart from the Annual General Meeting minutes which takes place on the anniversary of the Company's incorporation, all other minutes whether passed by the Board (i.e. the Directors) or by extraordinary general meeting (i.e. the shareholders) are required only as and when changes take place within the structure or operation of the Company that does not fall into the category of `day to day business'. The First Board Meeting Minutes should be filed with the records of the Company