DIFFERENT TYPES OF BUSINESS ENTITY 1 Flashcards
Legal formalities
Sole Trader, partnership - No
Company - Yes
Register with HMRC for self assessment of income tax
Sole Trader, partnership- Yes
Company - No (corporation tax)
Registration process for companies with company house
1) Memorandum of associate (images of founding shareholders)
2) Application for registration
3) Statement of capital (details of shares)
4) Statement of consent to act (details of directors)
5) Statement of compliance (with CA 2006)
Must a company pay registration fee?
Yes
When is company known as incorporated?
Once formed
What is the streamlined company registration service
Allows business to register company and register for tax at same time
What is a pre-incorporation contract?
Contract made by person acting on behalf of am unformed company. He is personally liable.
Pre-incorporation contract factors:
1) Company can’t ratify the contract
2) Company is not bound by the contract
3) Company can’t enforce the contract against a 3rd party
What’s an off the shelf Company?
One that’s already been formed
Off the shelf company advantages
+ Cheap and simple to buy
+ Can trade immediately
+ No problem of pre-incorporation contracts
+ Can be more appealing to lenders
Off the shelf company disadvantages
Some docs must be submitted to Companies House which will need to be tailored to the company
May have unsettled liabilities
Company name rules
1) Can’t be same as another on the index of names
2) Can’t use offensive or illegal names
3) Must have Secretary of states permission to use certain words (e.g England, Royal) which suggest gov connection
Where should business name be displayed?
On premises in prominent position where customers and suppliers have access
Documents which should include business name
1) Letters
2) Written orders
3) Invoices and receipts
4) Written demands for payment
5) Business website
Where must a company display full registered name
1) Their registered office
2) At other locations in which they conduct business
3) Place company records are available for inspection
