5. Company compliance Flashcards
Company formation
The process by which the company is created is described as incorporation, registration or formation.
A Co is formed under the Act, incorporated in UK and registered in Engl & Wales, Scotland or Northern Ireland
What types of companies may be incorporated?
Public Co limited by shares
Private Co limited by shares
Private Co limited by guarantee
Private unlimited companies
In addition, there are following Co types:
Charitable organisations which can be incorporated as guarantee co under Charities Act; and under Charities Act but without guarantee as an association or foundation of a Charitable Incorporated Organisation.
Community Interest Companies
Right to manage companies
How to form a company?
Registration is a process by which a Co is incorporated and becomes a legal entity separate from the the owners, “by persons subscribing their names to memorandum of association and complying with the requirements of the Act..”
Can be registered in 3 ways:
- Electronic software product
- Paper filing
- Web incorporation service
Describe registration process
- Choose a name (certain names require consent of Secretary of state and deemed to be sensitive)
- Send the following documents to the Companies House (Registrar)
Memorandum of Association
Articles of Articles of Association
Form IN01 – incl. proposed name, registered office, proposed secretary and directors with their service addresses
Approval of company name (if
required)
Registration fee
If all fine, the Registrar will issue a certificate of Incorporation
What is the registration process for public companies, CIC and RTM
PLC: Form SH50 application for a borrowing certificate, following which trading certificate is issued. (This is to confirm that the authorised minimum share capital has been subscribed.
CIC: Memorandum and Articles must comply with CIC regulations 2005.
RTM: No specific requirements on registration but has to comply with other rules e.g. Must be a private company limited by guarantee etc, Articles comply with provision for RMT, have its members as tenants etc
What additional requirements are for public companies?
PLC must apply for trading certificate by filing SH50, to confirm that the authorised minimum share capital has been subscribed. The authorised minimum requires that each share issued by plc must be paid up as to a minimum of 25% of its nominal value and 100% of any premium.
What companies can be re-registered (change the status of the company)
Most companies can change their status. The following changes are permitted:
Private (limited) to public (unless previously re-registered as unlimited)
Public to private limited
Private limited to unlimited (unless previously re-registered as unlimited)
Unlimited to limited (unless previously re-registered as unlimited)
Public to unlimited (unless previously re-registered as unlimited)
What type of companies cannot be re-registered?
CICs – from being a CIC company;
To or from a company limited by guarantee.
Confirmation statement
All companies are required to give notive to the Registrar of changes to their constitutions, officers, members, PSC, accounting information and charges.
What is a CHARGE?
A means by which a company offers its assets as security for a debt. A charge is a general term that includes a mortgage. A fixed charge relates to a specific asset; a floating charge relates to assets of a specified class that are in the Co’s possession ath the time the charge crystallises.
Advantages of electronic filing
Cheaper, instant confirmation, lower rejection rates, quicker, environ-ly friendly.
Offences under the Act
Failing to file accounts on time
failing to enter/update directors details in the register within prescribed timescale
failing to file amended Articles
failing to respond to a request on whether the details on the central register are up to date
failing to show Co’s details on the stationery
What is the deadline for bringing summary proceedings against a company/liable officer?
Summary proceedings must be brought within 3 years from the date of the offence and within 12 months of the date on which evidence comes to the knowledge of the SoS or the DPP. (s.1128)
What is the background to creation of modern Corporate Governance?
Rose to prominence following financial crisis and continuing perceived corporate excesses, gender pay gap and diversity in the boardroom and senior management.
First report published in 1992 - Cadbury Report
A core element is Governance Code of Best practice
Operates under comply or explain regime
Current Code - UK CGC 2018
What are the five sections of UKCGC 2018?
What are the 5 sections of UKCGC?
[Anagram: BAD CAR]
Board leadership and Company Purpose - Who is the Board?
Division of Responsibilities - What does the board do?
Composition, Succession and Evaluation How is the board chosen?
Audit, Risk and Internal Control - How does the board report?
Remuneration how is the Board paid
