Company Formation Guidance Notes

Contents

1. Introduction
   1. New companies
   2. Publication of company name, and details to be shown on company stationery
   3. The new company - looking forward
   4. Further information
   This is a guide only and should be read with the relevant legislation.

Introduction

This guide is about requirements for the incorporation of private limited companies.

All incorporated companies must disclose certain information to Companies House for the public record and to the people they deal with. This guide tells you:
when changes in the company's circumstances and particulars must be notified to Companies House;
where you must display the company name and what information must appear on company stationery.

You will find the relevant law in the Companies Act 1985 (as amended in 1989 and later).

Setting up a company brings many obligations. It may be worthwhile taking advice from a company formation professional such as Fletcher Kennedy Limited as to whether an incorporated company is the best way for you to run your business.

CHAPTER 1
New companies

1. A private company limited by shares - members' liability is limited to the amount unpaid on shares they hold.

2. Who can form a company?

The Companies Act generally allows one or more persons to form a company for any lawful purpose by subscribing to its memorandum of association.

3. How do I form a company?

Fletcher Kennedy Limited are company formation professionals, and are authorised by Companies House to incorporate electronically. If you choose to incorporate a company yourself, you will need to send the following documents, together with the registration fee to the Registrar of Companies:

A memorandum of association
Articles of association (except where Table A is adopted without modification - see question 5)
Form 10
Form 12
Each of these documents is explained below.

4. What is a memorandum of association?

This document sets out:
the company's name,
where the registered office of the company is situated (in England, Wales or Scotland); and
what it will do (its objects). The object of a company may simply be to carry on business as a general commercial company.
Other clauses to be included in the memorandum depend on the type of company being incorporated. The form of memorandum for each type of company is set out in a set of tables called The Companies (Tables A to F) Regulations, 1985. (In this guide we have called them 'the Tables'.) The company's memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.

5. What are articles of association?

This document sets out the rules for the running of the company's internal affairs. Model articles are provided in the Tables mentioned above.

A company may adopt the whole of Table A as its articles or any part of it.

A company limited by shares which has adopted the whole of Table A without modification does not need to deliver a copy for registration. However, you must attach a letter to your application saying this.

NOTE: If you adopt Table A without modification then you will need to appoint at least two directors. However, a private company can have just one director, if it's articles allow (see question 8). So if your company will have only one director, you need to adopt a modified version of Table A.

If Table A is adopted with modifications, you must deliver the articles for registration.

The company's articles delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.

6. What is Form 10?

Form 10 gives details of the first director(s), secretary and the intended address of the registered office. As well as their names and addresses, the company's directors must give their date of birth, occupation and details of other directorships they have held within the last five years. Each officer appointed and each subscriber (or their agent) must sign and date the form.

Officers acting as both director and secretary
The same person can be both a director and company secretary, provided there is another director. A sole director cannot also be the company secretary.

7. What is a registered office?

It is the address of a company to which Companies House letters and reminders will be sent. The registered office can be anywhere in England and Wales (or Scotland if your company is registered there). The registered office must always be an effective address for delivering documents to the company, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly. If a company changes its registered office address after incorporation, the new address must be notified to Companies House on Form 287.

Valid addresses
Companies House uses the Post Office address file to verify addresses; so, to avoid delays, please ensure that your proposed registered office address is recognised by the Post Office and always give the correct postcode on forms sent for registration.

8. What is the minimum number of officers a company requires?

Every company must have formally appointed company officers at all times.

A private company must have at least:
one director - but the company's articles of association may require more than one (See Question 5).
one secretary - formal qualifications are not required. A company's sole director cannot also be the company secretary.

After incorporation, you must tell Companies House about:
the appointment of a new officer - use Form 288a;
an officer's resignation from the company - use Form 288b;
changes in an officer's name or address or any of the other details originally registered on Form 10 - use Form 288c.
9. Can anyone be a company director?

In general terms, yes, but there are some rules. You can't be a company director if:
you are an undischarged bankrupt or disqualified by a court from holding a directorship, unless given leave to act in respect of a particular company or companies;
iThere is no minimum age limit in the Companies Act for a director to be appointed in England and Wales. However, he or she must be able to consent to their own appointment. You should seek legal advice if you intend to have a very young person as a director of your company.

In Scotland the Registrar will not register for any company the appointment of a director under the age of 16 years old. A child below that age does not have the legal capacity to accept a directorship - Age of Legal Capacity (Scotland) Act 1991. If you need more information, contact Fletcher Kennedy Limited

Some people not of British nationality are restricted as to what work they may do while in this country. If you need more information about whether such a person can become a director of a UK-registered company, contact:

Home Office Immigration and Nationality Department
Lunar House
Wellesley Road
Croydon
CR9 2BY (Tel: 0870 606 7766)

10. What is a Form 12?

Form 12 is a statutory declaration of compliance with all the legal requirements relating to the incorporation of a company. It must be signed by a solicitor who is forming the company, or by one of the people named as a director or company secretary on Form 10. It must be signed in the presence of a commissioner for oaths, a notary public, a justice of the peace or a solicitor.

Signing the declaration on Form 12
Form 12 must be signed and dated after all the other documents are signed and dated. This is because Form 12 confirms that all other registration requirements have been completed.
The form must clearly show if a person has signed on behalf of a corporate director. If it appears that the person who signed is not a director, this will cause delay.

11. What happens to the documents sent to the Registrar?

All company formation documents are subject to certain checks including checks of prospective officers against the Disqualified Directors' Register.

The Registrar then keeps the documents and makes them available for public inspection.

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

No. There are some restrictions on your choice of company name. Our guide, 'Company Names', explains how those restrictions may affect your choice of name.

Company name checks
It is important to check that the name you want is acceptable to Companies House before you complete the company formation documents.

Fletcher Kennedy Limited will always check the name before incorporation, and offer a free namecheck service

Briefly, the restrictions are that:
you cannot register the same name as another company;
the use of certain words is restricted; and
names likely to cause offence are not allowed.
It is also important to check whether your chosen name is similar to any other names already on the register. If your chosen name is too like another name, an objection could be made within the 12 months following the incorporation of your company and you could be directed by the Secretary of State to change the company's name.

15. Can I deal direct with Companies House to form my company?

Yes. However, while Companies House staff will be happy to give you guidance on general matters (such as filling in forms or advice on company names), they cannot advise you about the content of the memorandum and articles, or if an incorporated company is the best vehicle for your business.

If you are unsure about any aspect of forming a company, you should seek professional advice from a company formation agent.

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CHAPTER 2
Publication of company name and details to be shown on company stationery

Under the Companies Act 1985 your company must state its name (as it appears in its memorandum of association) in certain places and on its business stationery. Your company must also give certain information on all its business letters and order forms.

1. Where must the company name be displayed?

Every company must paint or affix its name on the outside of every office or place in which its business is carried on - even if it is a director's home. The name must be kept painted or affixed and it must be both conspicuous and legible.

2. On which documents must the company name be shown?

The company must state its name, in legible lettering, on the following:
all the company's business letters;
all its notices and other official publications;
all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to besigned by, or on behalf of, the company;
all its bills of parcels, invoices, receipts and letters of credit.
3. Must the company show any other details?

Yes. On all its business letters and order forms the company must show in legible lettering:
Its place of registration and its registered number. The place of registration must be one of the following, as appropriate:

The address of the registered office. If a business letter or order form mentions more than one address, it is recommended that you state which is the registered office address.
4. Must directors' names be shown?

A company does not have to state the directors' names on its business letters but, if it chooses to do so it must state the names of all its directors. In other words a company cannot be selective about which directors' names it shows - it must show all of them or none of them.

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CHAPTER 3
The new company - looking forward

1. What information does Companies House require?

Company directors have a personal responsibility for making information about the capital structure, management and activities of their companies available both to the members of the company and to the general public.

For companies with limited liability, this will include accounts. If your company is unlimited, accounts must be delivered to the Registrar if:
it is a subsidiary undertaking or parent of a limited company; or
it has been a banking or insurance company or operated a trading stamp scheme during the period covered by the accounts.
2. What period should the accounts cover?

A company's first accounts must start on the day of incorporation. The first financial year must end on the 'accounting reference date' or a date up to seven days either side of this date (see question 3). Subsequent accounts start on the day following the year-end date of the previous accounts. They end on the next 'accounting reference date' or a date up to seven days either side.

3. How is the accounting reference date set?

The accounting reference date 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).

4. Can the accounting reference date be changed?

Yes. You may change it by sending Form 225 to the Registrar. You must do this during the accounting period affected by the change or during the period allowed for delivering the associated accounts to us. For more information, see our guide, 'Accounts & Accounting Reference Dates'.

5. How long do I have to deliver accounts?

The first accounts of a private company must be delivered:
within 10 months of the end of the accounting reference period; or
if the accounting reference period is more than 12 months, within 22 months of the date of incorporation, or three months from the end of the accounting reference period, whichever is longer.
If the accounting reference period is more than 12 months, within 19 months of the date of incorporation, or three months from the end of the accounting reference period, whichever is longer.
6. What else must I tell Companies House?

Here are some of the important things that you must tell us about - using, in most cases, a special form we provide, and within the time limits stated.
Changes of director(s) and secretary, within 14 days. For:

appointments use Form 288a
resignations use Form 288b
change of personal details use Form 288c

Details of new shares being allotted, within one month. Use Form 88(2).

Any special or extraordinary resolutions and certain types of ordinary resolution, within 15 days of them being passed by the company. There is no special form but we need to receive a copy of the resolution. More information about company resolutions is available in our guide, 'Resolutions'.

Details of any mortgage or charge created by the company, within 21 days. See our guide, 'Company Charges and Mortgages' or for Scottish companies, 'Company Charges (Scotland)'.

A change of registered office, within 14 days. Use Form 287. The change becomes legally effective only when we have registered the form.
7. What about annual returns?

Every company must deliver an annual return to Companies House at least once every 12 months. It has 28 days from the date to which the return is made up to do this.

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CHAPTER 4
Further information

1. Where can I go for help?

Companies House staff in Cardiff and Edinburgh will be able to advise you on matters generally, but when you start a company it is important to get things right. So that you don't make what could turn out to be costly mistakes, it may be sensible to consult a company formation agent.

2. How do I send information to the Registrar?

You may deliver documents to the Registrar by hand (personally or by courier), including outside office hours, bank holidays and weekends to Cardiff, London and Edinburgh.

You may also send documents by post or by the Hays Document Exchange service (DX). If you send documents please address them to:

For companies incorporated in
England & Wales: For companies incorporated in
Scotland:
The Registrar of Companies
Companies House
Crown Way
Cardiff CF14 3UZ

DX33050 Cardiff The Registrar of Companies
Companies House
37 Castle Terrace
Edinburgh EH1 2EB

DX ED235 Edinburgh 1

Please note: Companies House does not accept accounts or any other statutory documents by fax.

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