Frequently Asked Questions

A company is a 'legal person' that is separate from its owners (the shareholders/members) and the people who run it (the directors). Companies can own property, conduct business, borrow money and do most things that an individual can.

Companies do not have a physical presence and therefore cannot do anything for themselves (such as sign a contract). A company's officers, employees and agents must act on the company's behalf. For example the directors of a company could sign a supply agreement on behalf of the company. The agreement would be between the company and the supplier, rather than the directors and the supplier.

Risk - Forming a limited liability company can limit your exposure to any debts generated by your new business.

Taxation - Forming a company may offer tax advantages (always speak to your accountant).

Status - Forming a company shows that you are committed to your business idea. It is more official than operating as a sole trader. Customers and suppliers may also refuse to deal with you unless you operate through a company.

Finance - Investors may want to own a share of your business in exchange for their investment. If you form a company you can issue shares to an investor (although not to the public unless you form a Public Limited Company).

Ownership - If more than one person is going to own a share of a business then the easiest way to split the ownership is to form a company and issue shares.

Limited liability limits the risk of going into business. Limited liability is available if you form a Private Limited Company or a Public Limited Company. The overwhelming majority of companies formed in the UK are limited liability companies.

The effect of limited liability is best explained by way of example. If you invest £100 in a limited liability company (buying 100 £1 fully paid shares) then the maximum amount which you can lose if the company is not successful is normally* limited to your investment of £100, even if your company generates larger debts. Without limited liability you are personally liable for all of your businesses debts, no matter how large they are. Without limited liability you are potentially risking all of your assets, not just the amount you decide to invest in your business.

It is comforting to know that you can shield your personal assets such as your home, from the risk of going into business.

*Beware, there are exceptions to this rule. For example: it does not apply if you have given personal guarantees, or if you continue trading after you know - or should have known - that the company is unable to pay its debts.

All companies are obliged to file accounts and confirm their details to Companies House each year (on an Annual Return).

Yes, this is known as a Dormant Company. The only requirement is that you file an Annual Return and Dormant Company Accounts with Companies House each year. We can assist with that, please contact us for further information. Companies House must also be informed of any changes to your company's details.

Forming a Dormant Company is an effective way to reserve a name.

You can use our free company name check service.

A director is responsible for the day-to-day running of the company. A shareholder owns a share of the company. Directors can be shareholders and vice-versa. The majority of smaller companies are both owned and run by the same people.

There are no formal qualifications required to become a company director. Although a director must not be:

• under the age of 16;

• disqualified from being a director by the Courts; or

• an undischarged bankrupt.

There are no residence or nationality requirements for directors. For example, a French citizen living in Spain can be a director of an English company.

One - for a private limited company. Since 6 April 2008 a single person can form a company, and appoint themselves as the sole director and shareholder. Companies are no longer required to appoint a company secretary.

If you decide to appoint a company secretary and your company only has one director then the secretary you appoint cannot also be the sole director. In other words you will need two people, either two directors, one of which is the secretary, or one director and a secretary.

Public Limited Companies are still required to appoint a company secretary. They must also have at least two shareholders.

You will receive:

Certificate of Incorporation

Memorandum and Articles of Association (two copies if package sent by post)

First Board Meeting Minutes

Share Certificate(s) (or Members' Certificates is company registered by guarantee)

Company Registers

Form SH01 – Notice of Allotment of Shares* (not applicable to companies registered by guarantee)

Form AA01 – Change of Accounting Reference Date

*For future use if required

We require the following information:

Proposed Company Name

Registered Office Address

This address will be used for statutory mail from Companies House and HM Revenue and Customs. Your registered office is required to be in England and Wales, Scotland or Northern Ireland. It cannot be a PO Box.

Director Details (minimum 1)

• First name

• Last name

• Date of Birth (Must be 16 years or older)

• Nationality

• Occupation

• Country of Residence

• Residential Address

• Service Address (can be the same as the Registered Office Address or Residential Address)*

• 3 Security Questions (these act as an online signature)

• First three letters of Mothers Maiden Name

• First three letters of Eye colour

• First three letters Fathers first name

Shareholder Details (minimum 1 - can be the director)

• First name

• Last name

• Residential Address

• Service Address (can be the same as the Registered Office Address or Residential Address)*

• Share Currency (GBP, EUR)

• Number of shares

• Value per share

• 3 Security Questions (these act as an online signature)

• First three letters of Mothers Maiden Name

• First three letters of Eye colour

• First three letters Fathers first name

Secretary Details (not compulsory)

• First name

• Last name

• Residential Address

• Service Address (can be the same as the Registered Office Address or Residential Address)*

• 3 Security Questions (these act as an online signature)

• First three letters of Mothers Maiden Name

• First three letters of Eye colour

• First three letters Fathers first name

*The Service Address is the official address of a company director. It serves as the official contact address for the individual where they receive statutory personal mail from HMRC and Companies House. A registered office, on the other hand, is the official contact address for the company or LLP itself.

Registering as a sole trader informs HMRC that you are going to be self-employed and will be earning money through your own business. It does not register your business, or create a business; it just tells HMRC what you are doing so that they know how to tax you. As a sole trader you are trading as an individual and taking on all financial and legal liability yourself.

A Company is a separate legal entity and has the benefit of Limited Liability from legal and financial issues. Profits are subject to Corporation Tax, which is currently set at 19%.

If you are the director and shareholder of a limited company, you may choose to take a small salary and draw most of your income in the form of dividends. By doing this you can minimise the amount of National Insurance Contributions (NICs) you have to pay because dividends are taxed separately, and are not subject to NICs. For more information we recommend that you seek advice from your accountant/tax adviser.

Anyone can become a company director (unless they have been specifically banned from doing so - usually as a result of bankruptcy or legal proceedings). You have to be 16 years of age or older to form a company (Section 157 Companies Act 2006) although in practical terms it is extremely difficult to do things like open a bank account for your company until you are 18.

You only need one person to form a limited company. According to Section 154 of the Companies Act 2006 - A company limited by shares requires at least one (non-corporate) director but there may be more and it is possible for a limited company to be director of another limited company, provided there is at least one person who is already a director.

There is no longer a requirement to have a company secretary (Section 270 The Companies Act 2006) but you may choose to do so if you wish.

Since Section 270 of the Companies Act 2006 came into force there is no legal requirement for a private limited company to have a secretary. Anyone can act as the Company Secretary of a private limited company and a person may consent to act as both the Company Secretary and be a Director of the same limited company.

If an application if filed on your behalf during normal business hours (i.e. 9am-5pm) we typically receive the registration number the next morning (although it can on occasion arrive the same day)

Both a Memorandum of Association and Articles of Association are required for a company formed in the UK under the Companies Act 2006 and previous Companies Acts. The Memorandum of Association is the document that sets up the company and the Articles of Association set out how the company is run, governed and owned. For example, rules concerning the holding of meetings and the way in which the company makes decisions.

The Certificate of Incorporation is the document issued to confirm that Companies House has incorporated your company name and states the date of incorporation and the company number.

The following restrictions and requirements must be taken into account when choosing a company name:

• It must be unique – it cannot be the ‘same as’ or ‘too like’ the name of an existing company.

• It must end with “limited” or “Ltd”. Companies situated in Wales may use the Welsh equivalents "Cyfyngedig" or "Cyf".

• Certain characters, signs, symbols and punctuation are not be permitted (see link below).

• It cannot suggest a connection with HM Government, a devolved government or administration, or a specified public authority.

• Permission is required if it includes any sensitive words or expressions (see link below).

• It can only be a maximum of 60 characters long.

• Public Limited Companies must add "PLC" or "Public Limited Company" at the end.

• It should not be offensive or include offensive words.

• You must not include www at the beginning.

You should also check your company name against the Trade Mark Register to make sure it’s not registered as a trade mark.

Most commonly, you see one hundred shares issued in small companies. This allows the allocation of the shares to reflect the shareholders’ commitment to/control of the company, while being inexpensive. The issue of 100 shares also makes it easier to define percentage holdings when there is more than one shareholder.

The registered office is the company's official address to which official correspondence may be sent and notices served, such as communications from HM Revenue & Customs and Companies House.

All companies registered at Companies House must have their registered office in the country in which they are registered: England, Wales or Scotland. The registered office must be a valid postal address (or a PO Box which has been validated by the Royal Mail). It is perfectly acceptable to have your residential address as your registered office.

From the date of dissolution any assets held by a dissolved company will be 'Bona Vacantia'. This means they belong to the Crown. The company's bank account will be frozen and any credit balance in the account will be passed to the Crown.

If a company is to be restored to the Register to continue trading all outstanding information must be submitted to the Registrar. This could include confirmation statements and accounts and forms appointing a director, resigning a director or amending the registered office of the company.

Once all the necessary documents have been correctly submitted to the Registrar the company will be restored to the Register often within a few days.

Our Fees: £240.00

Fixed Fees:

Companies House Application Fee: £100.00 (no VAT)

Treasury Solicitor's Waiver Fee: £64.00 (no VAT)

Potential Additional Fees:

Annual Confirmation Statement - £40 for each return required

Accounts late filing Penalties - Any penalties that were due at the time of dissolution will need to be paid (see below)

If the company's registered office was within the Duchies of Cornwall and Lancaster then the Waiver fee will be £150 + VAT instead of £64 as the waiver must come from Farrer and Co instead of the Treasury Solicitor.

Our Fees Include

• The preparation and submission of the restoration application form

• The preparation of each Annual Confirmation Statement

• Obtaining the waiver letter from the Treasury Solicitor

• Liaising with Companies House regarding any Late Filing Penalties

NOTE: You and your accountant are responsible for preparation of Annual Returns and Accounts and for providing these to us for submission.

Yes, if it is neither carrying on business nor in operation. The registrar may take this view if, for example:

• he has not received documents from a company that should have sent them to him;

• mail that the registrar has sent to a company's registered office is returned undelivered;

• the company has no directors.

Before striking a company off the register, the registrar is required to write two formal letters and send notice to the company’s registered office to inquire whether it is still carrying on business or in operation. If he is satisfied that it is not, he will publish a notice in the relevant Gazette stating his intention to strike the company off the register unless he is shown reason not to do so.

A copy of the notice will be placed on the company's public record. If the registrar sees no reason to do otherwise, he will strike off the company not less than three months after the date of the notice. The company will be dissolved on publication of a further notice stating this in the relevant Gazette.

The Registrar will take into account representations from the company and other interested parties such as creditors. If there is good reason not to strike the company off the register, he may suspend the action until the objection is resolved.

How does the Registrar’s intention to strike off a company appear in the London Gazette?

The Company Law Official Notifications Supplement to the London Gazette publishes weekly notices on microfiche. Copies are available from:

The London Gazette

PO Box 7923

London

SE1 5ZH

thegazette.co.uk

An application for administrative restoration can be made by a former director or member of a company.

A company has a unique company number. Legally, it is referred to by that company number and not by the company name. This is because the company name can be changed but never the company number. Any assets of a dissolved company remain in that dissolved company. Once a dissolved company has been restored it will continue as if it had never been struck off and any assets in the company at the date of strike off will be returned.

In order to restore the company it may be necessary to submit an outstanding confirmation statement. The confirmation statement cannot be filed electronically as the company is dissolved and it is therefore necessary to submit the form on paper.

The filing fee for paper confirmation statements are due after 1 October 2009 is £40 per Return. The filing fee for electronically filed Confirmation Statements £13 per Return.

A Company can be restored through an administrative restoration regardless of whether the company was removed by the Registrar under the 1985 or the 2006 Companies Act. The general belief is that to be eligible for an administrative restoration the company must have been:

• Struck off the register under sections 1000 to 1002 of the Companies Act 2006, and

• Dissolved for no more than 6 years at the date the registrar receives the application for restoration

However companies that have been struck off the register under section 652 of the 1985 Companies Act can be administratively restored under section 1024 of the 2006 Companies Act provided they meet the conditions set out in section 1025 of the 2006 Companies Act

To find out if your company can be administratively restored please contact us.

We can assist in the preparation of dormant accounts and confirmation statements that are required in order to bring the affairs of the company up to date so that the company may be restored.

We can also assist in ensuring that the necessary forms relating to the appointment and resignation of directors and secretaries and changes of registered office are completed and ready for submission to the registrar.

If you would like us to assist with filing of dormant accounts and confirmation statment please click on either of the links below.

The company's name could be changed on restoration if at the date of restoration the company's former name is the same as, or similar to, another name on the Registrar's index of company names.

If this is the case, it will need to choose an alternative name, and on restoration, a change of name certificate will be issued.

Or, The Registrar could restore the company to the Register using its registered number as the company name. The company then has 14 days from the date of restoration in which to change its name.

Alternatively, the directors could pass a resolution to change the company name. A copy of the resolution and notice (Form NM05) of the change of name should be sent to Companies House with the appropriate fee.

Property, cash and any other assets owned by a company when it is dissolved automatically pass to the Crown. This is because the law says this happens. You can find the main provisions of this law in the Companies Act 2006.

Liabilities of a company do not pass to the Crown on dissolution: they are normally extinguished.

The Treasury Solicitor collects some bona vacantia assets for the Crown. The Bona Vacantia division (BVD) of the Government Legal Department is responsible for this function.

A discretionary grant from the Bona Vacantia Department (BVD) enables sums of money to be recovered without making an application for the company to be restored to the register.

Only one grant will be made in respect of each dissolved company and where the company can be restored the maximum grant is £3,000.

All grants are discretionary. No-one has a right to a grant.

The BVD will usually only consider making grants out of money that they have received. Grants will not usually be made of other types of assets themselves, or from the proceeds of sale of other types of assets.

The BVD will usually only consider applications for discretionary grants from:

• former shareholders (‘members’) as long as the company was solvent when it was dissolved

• former liquidators

• former administrators

• former company voluntary arrangement (CVA) supervisors

Former directors of the company cannot apply for a discretionary grant unless they were also shareholders of the dissolved company.

The BVD cannot deal with your application until they have received and banked the funds of the dissolved company from the bank or person holding the funds. If you are not sure whether BVD has the funds, please check with the bank or person holding the funds. BVD will not make enquiries for you.

If the company can still be restored, then restoring it to the register is usually the correct way to regain possession of its property and rights, including money.

Where the company can be administratively restored, BVD will not generally make a discretionary grant.

The BVD appreciates that if a company cannot be restored administratively, restoring the company through the courts can in some cases be more complex or expensive so the Treasury Solicitor will consider making a discretionary grant in such cases, but the maximum grant is £3,000.

A grant will only be made if the applicant undertakes not to apply to restore the company in the future.

If the BVD make a discretionary grant, you will have to pay the their proper legal costs and disbursements for dealing with your application. These costs are usually £300. Costs and disbursements will always be deducted from any grant that is made, so if BVD hold less than £300, a grant cannot be made.

For grants over £750, BVD also keep 5% of the value of the grant after deducting costs. This is called a reservation. This is kept in case, in the future, the Treasury Solicitor has to pay creditors of the company money paid out as part of the discretionary grant.

Our fees are £400

The PSC Register is a record of all persons and corporate entities with significant control in a registered business. It has been introduced to increase transparency for UK registered businesses. In the past it had been possible to register a UK business with nominee directors and shareholders in place, thus keeping the real beneficial owners details off of the public record at Companies House. The PSC register requires all UK registered businesses, covered by the legislation, to keep a register of these previously hidden controllers or beneficiaries. If you have control over a company, your name must be added to the register!

Limited companies and LLP’s now need to identify who their persons with significant control are. These PSC’s must then be entered onto the business’s own PSC register and also notified to Companies House. For the vast majority of businesses with very typical simple structures this will be a very straight forward process.

For a private limited company (Ltd) with one class of ordinary voting shares in issue, typically any shareholder that holds 25% or more of the company shares will be a PSC or person with significant control. The company already records this information on the register of members so it just needs to be entered onto the PSC register and notified to Companies House when filing a ‘confirmation statement’. Any shareholder with less than 25% shares is not usually a PSC unless they have some other ‘nature of control’.

For a typical limited liability partnership (LLP) where all members are designated and are natural people (not corporate members) then each member will be a PSC. This assumes each member has equal control and rights to profit share and there are not more than 4 members. For example, a typical LLP will have just two designated members that have equal control so both have 50% control and are both therefore PSC’s. Their data is already recorded in the register of members so just needs to be added to the PSC register and notified to Companies House when filing the next ‘confirmation statement’.

A PSC is by definition a person, and not a legal entity (such as a company or a Limited Liability Partnership (LLP)). But a company or LLP might be owned or controlled by another legal entity and not an individual. This can be a confusing part of the legislation to apply correctly but the basic principal is that if company A is the controller of company B and company A maintains a transparent register of controllers then company A can declared as a PSC for company B. The reasoning is that an interested party can see company A is the PSC and can then look at company A’s own PSC register and see who the real PSC persons are behind that company. It is therefore still transparent who controls company B from company A’s PSC register.

A legal/corporate entity’s details can be declared as the PSC if it meets any one or more of the conditions:

• It keeps its own PSC register

• It is subject to Chapter 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules (DTRs) 8

• It has voting shares admitted to trading on a regulated market in the UK or European Economic Area (other than the UK) or on specified markets in Switzerland, the USA, Japan and Israel.

If the legal entity does not meet any of the above criteria you cannot enter that entity as the PSC on the register of the UK Company as this is not transparent. You would need to identify the ultimate controllers behind the entity and they would be the PSC’s entered on to the UK company register.

If a company or LLP does not know who its PSC’s are then it must take reasonable steps to find out. This will typical involve sending notices to any know persons or advisors that the company or LLP feels may be able to supply the information. The notices must give no more than one month to reply. PSCs themselves have an obligation to notify the company within one month of becoming a PSC. They commit an offence if they fail to notify or respond to a notice from the company. If the PSC information is still unknown after notices have been issued a company or LLP can consider placing restrictions on the PSC.

Applying restrictions is a significant step which can only be taken if the steps described in the legislation have been properly taken. Your company or LLP is not required by law to impose restrictions, but you must seriously consider doing so as part of the legal requirement for you to take reasonable steps. If your company is in this situation and chooses not to impose restrictions, you should be able to justify your decision.

Any company or LLP considering restrictions on a possible PSC should review the full legislation carefully and seek advice from a specialist company lawyer before implementing any restrictions.

A company or LLP that does not know who its PSC’s are must record this in its PSC register and at Companies House using one of the following statements –

• PSC exists but have not been identified

• PSC details are not confirmed

• PSC contacted but no response

• Restrictions notice issued to PSC

If you have a nominee structure in place then you need to declare the real controllers and beneficiaries of the company or LLP on the PSC register if their control exceeds the limits specified under ‘Nature of Control’. It is an offence to declare a nominee as a PSC if this hides the identity of a real PSC that would otherwise be declared. This is a criminal offence and can lead to prosecution for the persons involved.

The PSC register has been designed to make UK limited companies and LLP’s a transparent and trusted business entity.

A company can have no PSC’s and this should be declared at Companies House that there are no PSC’s registerable.

A typical example of when this might happen for a company is if there are 5 or more shareholders all holding 20% of the shares. No single shareholder has significant control as all shareholders own less than 25% each.

For an LLP that has 5 designated members with equal rights and control over the LLP there would be no PSC with 25% or more control.

A company or LLP that has no PSC’s must record this in its PSC register and at Companies House. It is not permitted to leave the PSC register blank.

All PSC person’s residential addresses and day of birth (not the month or year) are suppressed on Companies House records and should be held on a separate private company PSC register as standard. If a company feels its PSC’s may be at risk of intimidation or violence as a result of their information being recorded in the PSC register then the company or the PSC can apply to have the information further suppressed. This is only possible in exceptional circumstances. There are rules in place to suppress just the residential address from the credit reference agencies or the full PSC details can be suppressed if necessary.

If you have registered a company (or LLP) through us a PSC Register forms part of the Statutory Registers that were sent with the incorporation documents. If you did not register your company (or LLP) through us then we are able to supply you with replacement Statutory Registers, simply click on the link below for more information.

A domain is your website address on the internet and is used in 2 ways:

• The domain name is the name entered into an internet browser enabling people to find a website eg www.yourcompanyname.co.uk

• The domain name forms part of the e-mail address for your business eg info@yourcompanyname.co.uk

Without registering your domain name you won’t be able to get your business online with its own website, which is a fundimental requirement to trade successfully for the overwhelming majority of businesses.

We recommend that you register a domain name in the same name as your business to prevent other people from doing so and passing off their website as yours and stealing your customers. You should do this even if you do not intend to use that domain address for your website or do not wish to use it for some time. We also recommend registering several variants of your business name. this would include plural, common mis-spellings, hyphenated and most importantly several suffixes