An application to do business is made to the registrar, along with a statutory declaration: confirming that the nominal share capital of the company is not less than the 'authorised minimum' prescribed by statute. Specifying the paid-up share capital at the date of application. Specifying the preliminary expenses of the company (actual or estimated) and the persons by whom any of those expenses have been paid or are payable; and specifying any amount or benefit, paid or given, or intended to be paid or given, to any promoter of the company, and the consideration for the payment or benefit. Share registration work is involved and complex and most listed PLCs with a large number of shareholders and/or active share registers tend to place such work with specialist companies (particularly subsidiaries or divisions of the main clearing banks).
Although share registration work for LTD companies tends to require far less time since few shares may change hands for long periods, it may still be complex and it is essential that those involved are well aware of the requirements.
In English Law and other countries with similar laws a private limited company by shares (limited or Ltd.) is a type of limited company, with liability limited to the capital invested, i.e. by the sale of shares. In other words the shareholder personal assets are protected in the event of bankruptcy but they will lose the capital invested in their shares. Each company must have the suffix Limited (Ltd) as part of its name. In the Republic of Ireland Teoranta (Teo) may be used instead, though this is limited mainly to Gaeltacht companies.
Cyfyngedig (Cyf) may be used by Welsh companies in a similar fashion. Companies must apply to the relevant registrar - Companies House in Great Britain, the Northern Ireland Registrar of Companies in Northern Ireland, or the Companies Registration Office, Ireland in the Republic of Ireland - to be formally incorporated as a company. In the Republic of Ireland, a private limited company may have a maximum of fifty shareholders. A company must have at least one director and a company secretary. They cannot be the same person. The company Articles of Association may have more specific requirements however. A private limited company shares are not available to the general public, the major distinguishing feature between a private limited company and a public limited company.
Most companies are of this type, may not issue common shares, mutual company preferred shares are not preferred shares in the sense.
A company is owned by its shareholders. Companies without a share capital will have some other method of determining ownership. The overwhelming majority of companies have a share capital consisting of one or more classes of shares. Company law and company lawyers have been extremely hesitant in offering any precise legal definition of the share, being content to deal with shares in a pragmatic rather than a theoretical manner. The most generally accepted definition of the share states that it represents: the interest of the shareholder in the company measured by a sum of money, for the purposes of liability in the first place and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders (Borland's Trustees v Steel (1901)).
The three elements of this definition will be examined in turn, followed by a consideration of the most common types of shares.
In a company limited by shares, the company's Memorandum of Association has a capital clause which states the amount of the share capital by which the company proposes to be registered and its division into shares of a fixed amount. The amount of share capital with which a company is initially registered (or the amount to which it may subsequently be increased) is the AUTHORISED or NOMINAL capital of the company. It sets the maximum number of shares that the company can issue together with the value of each share (s. 2 (5)). Shares in limited companies are required to have some nominal value: no par value shares, as are found in other jurisdictions, such as the USA, are therefore not permitted in the UK, although the shares need not be valued in Sterling.
There is no requirement that companies issue shares to the full extent of their authorised capital. It is important, therefore, not to assume that the authorised capital represents a meaningful statement of the company's true capital.
This is our most popular package with UK residents, and includes: The submission of forms detailing your company's executive officers The registration of your £1,000 authorised share capital (a minimum of one share must be issued) Company formation is usually achieved within 6-8 workday hours (Companies House permitting) Payment of UK legal and initiation fees The appointment of your own candidates as directors and secretary (a minimum of two people are required) The following documents will be e-mailed to you (Note: these documents are to be printed and signed): Electronic Certificate of Incorporation (PDF) Electronic Memorandum & Articles of Association (MS Word) Minutes of the First Meeting of Directors (MS Word) Share Certificates and company Register
Economy Package
£ 82.00
Annual Maintenance Fee £50.00
This is our most popular package with EU residents, and includes: The submission of forms detailing your company's executive officers The registration of your £1,000 authorised share capital (a minimum of one share must be issued) Company registration is usually achieved within 6-8 workday hours (Companies House permitting) Payment of UK legal and initiation fees The appointment of your own candidates as directors and secretary (a minimum of two people are required) A registered office address for 12 months, provided by Coddan An application form for the following year's renewal of the Registered Office Address service (£50.00) Annual Return and Annual Account reminder The following documents will be e-mailed to you (Note: these documents are to be printed and signed): Electronic Certificate of Incorporation (PDF) Electronic Memorandum & Articles of Association (MS Word) Minutes of the First Meeting of Directors (MS Word) Share Certificates and company Register
Premier Package
£ 131.95
Annual Maintenance Fee £99.95
This is our most popular package with small business, and includes: The submission of forms detailing your company's executive director The registration of your £1,000 authorised share capital (a minimum of one share must be issued) Company incorporation is usually achieved within 6-8 workday hours (Companies House permitting) Payment of UK legal and initiation fees Applicant appointment of director for company (appointed electronically) A registered office address for 12 months, provided by Coddan An application form for the following year's renewal of the Registered Office Address service (£50.00) Nominee company secretary service for 12 months (next year - £49.95) Annual Return and Annual Account reminder The following documents will be posted to you (these documents will be sent via Royal Mail): The original laminated Certificate of Incorporation A bound copy of the Memorandum and Articles of Association The Minutes of the First Directors' Meeting Two printed share certificates and Company Register
Deluxe Package
£ 256.95
Annual Maintenance Fee £224.95
This is our most popular package with overseas residents, and includes: The filing and registration of your company in England The registration of your £1,000 authorized share capital (a minimum of one share must be issued) Company formation is usually achieved within 6-8 workday hours (Companies House permitting) Payment of UK legal and initiation fees A registered office address for 12 months, provided by Coddan An application form for the following year's renewal of the Registered Office Address service (£50.00) Nominee Company secretarial service for 12 months (next year - £49.95) Coddan provides a company nominee director service for 1 year (next year - £125.00) The name of the nominee director & secretary will appear as a public record Annual Return and Annual Account reminder The following documents will be posted to you (these documents will be sent via Royal Mail): The original laminated Certificate of Incorporation A bound copy of the Memorandum and Articles of Association The Minutes of the First Directors' Meeting Two printed share certificates and Company' Register A pre-signed, undated letter of resignation from the nominee director A General Power of Attorney signed by nominee director An indemnity Letter for General Power of Attorney A nominee service agreement which provides for the indemnification of the nominees
Name Protection
£ 22.00
Annual Maintenance Fee £60.00
The purpose of this package: This package allows you to register a company name with Companies House and thus prevent this name being used to form a company by anyone else This package includes: The registration of a non-trading limited company with your choice of name Payment of UK legal and initiation fees A nominee director A nominee secretary A nominee shareholder A registered office address Management of the company: Coddan will file the annual return and dormant company accounts on your behalf for an annual fee of £60.00 If you do not wish to renew the management option at the end of term, the company will be dissolved
Business Start-Up: Legal Requirements
Company subscribers may be residents outside the UK You must appoint a minimum of ONE Director There is no maximum number of Directors Directors can be corporate bodies or private individuals A Director can be of any nationality Directors need not be formally trained All companies must appoint a company Secretary Secretaries can be corporate bodies or private individuals A Secretary can be of any nationality. If there is only ONE Director he or she CANNOT also be the Secretary A company must have a minimum of one shareholder who may be a corporate body or an individual No minimum paid up share capital A minimum of one share may be issued Capital may be denominated in any currency Shareholders and directors meetings may take place outside Great Britain The company is required to have a registered office in the UK
An auditor is a person who makes an independent report to a company's members as to whether its financial statements have been properly prepared in accordance with the Companies Act 1985. The report must also say if a company's accounts give a true and fair view of its affairs. Most companies are required to have their accounts audited - see question 2 below.
MUST ALL COMPANY ACCOUNTS BE AUDITED?
No. If they qualify for exemption and wish to take advantage of it, dormant companies and certain small companies do not have to have their accounts audited. To qualify for audit exemption as a small company, the company must:
Important Links
Coddan is one of the foremost and most economical providers of limited companies formation and new business entity registration services in the UK. Coddan is a leading company set-up agent that has expertise in off the shelf companies, ready-made companies, own name company formation as well as company search, credit checking, company secretarial, accounting and bookkeeping, tax advice & charity registration. Simple cost effective limited company set-up. No paper forms to complete, all information provided electronically. Coddan offer a range of services for business, including business company set-up, virtual office services, mailing address, and company secretarial services.
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Qualify as small. Have a turnover of not more than £1 million; and have a balance sheet total of not more than £ 1.4 million (For accounts covering a financial year that ended before 26 July 2000, the turnover must not be more than £350,000). For a charitable company to qualify for total audit exemption, it must qualify as small, its gross income must not be more than £90,000 and its balance sheet total must not be more than £1.4 million. Charities with a gross income between £90,000 and £250,000 and a balance sheet total of not more than £1.4 million qualify for partial exemption.
Dormant company audit exemption may be claimed by a limited company that has not traded during a financial year, unless it is a banking or insurance company or an authorised person under the Financial Services Act 1986. Dormant companies do not need to appoint auditors and can deliver very basic accounts to Companies House.
HOW IS A COMPANY AUDITOR APPOINTED?
The directors appoint the first auditor of the company. The auditor then holds office until the end of the first meeting of the company at which its accounts are laid before the members. At that meeting the members of the company can re-appoint the auditor, or appoint a different auditor, to hold office from the end of that meeting until the end of the next meeting at which accounts are laid.
However, private companies can pass an "elective resolution" not to lay accounts before the members in a general meeting. If this is done, then the auditor has to be re-appointed, or a new one appointed, at another meeting of the company's members that must be held within 28 days of the accounts being sent to the members.
Private companies can also pass an elective resolution dispensing with the need to appoint an auditor every year. If that happens, the auditor already appointed remains in office without further formality until a resolution is passed to re-introduce annual appointment or to remove him or her as auditor. For more information on resolutions, see the booklet "Resolutions".
WHAT DOES AN AUDITOR DO?
The auditor will check the accounts and accounting records of the company and prepare a report for the company's members. The report will say if the company's annual accounts have been properly prepared in accordance with the Companies Acts and if they give a true and fair view of the company's financial affairs. The auditor will also consider if the information given in the directors' report is consistent with the annual accounts. If in the auditor's opinion, the accounts or directors' report does not comply with the Companies Act, the auditor will say so in the report.
CAN MY ACCOUNTANT BE MY AUDITOR?
An auditor must be independent of the company, therefore, a person cannot be appointed as an auditor if they are: an officer or employee of the company or an associated company; a partner or employee of such a person, or a partnership of which such a person is a partner.
If your accountant does not fall into one of the above categories and if he or she has a current audit-practising certificate issued by a recognised supervisory body, they may act as the company's auditors.
NB: Not all members of a recognised supervisory body are eligible to act as an auditor but the appropriate body will be able to tell you whether a particular individual or firm has a current audit-practising certificate.
IS AN AUDITOR ONLY CONCERNED WITH ANNUAL ACCOUNTS?
Yes. However, there is nothing to stop you employing an auditor for other purposes, such as keeping the books or compiling the tax return, provided he [ or she ] does not take part in the management of the company. You should agree an engagement letter that sets out the auditor's duties. For instance, the company may want the auditor to prepare a management report after an audit, listing all the minor faults that were found even if they have been corrected.
Guidance & FAQs
FAQs: Role of a Company Auditor
£ 32.00
This is our most popular package with UK residents, and includes:
The submission of forms detailing your company's executive officers
