Business - Types of company and incorporation

Question 1

What is needed to set up a PLC?

Answer 1

1. Minimum 50k share capital and paid up at least 25% of nominal value with premium all paid
2. Needs Company secretary
3. PLC after name and AoA suitable for a pLC

Question 2

What is needed to set up Ltd?

Answer 2

1. At least 1 director and SH
2. AoA
3. No minimum share capital

Question 3

What tax is paid by a) sole trader
b) Partnership
c) Ltd

Answer 3

a) Income, CGT, VAT if over 90k
b) Income, CGT VAT over 90k
c) Corp tax, CGT on sale of shares, Income on dividends, VAT over 90k

Question 4

3 characteristics of sole trader?

Answer 4

1. Easy to set up, no registration
2. Not sep legal entity, full liability on owner
3. Cannot raise capital via shares

Question 5

3 characteristics of a Partnership?

Answer 5

1. Unincorporated, unlimited personal liability for partners and can’t raise finance
2. Easy to form, no registration requirements
3. 2 or more people, if no formal agreement made terms of the PA 1890 apply automatically

Question 6

3 characteristics of an LLP
LLPA 2000

Answer 6

1) Incorporated partnership, separate legal entity
2) Can raise money via debt and granting charges
3) Some admin duties, governed by LLP agreement

Question 7

What are the steps to set up a PLC/LTD using the model articles?

Answer 7

1) Need a company name that meets CH rules
2) Need to document business activities and registered address plus email address
3) Statement of capital documenting shareholders and their holdings
4) AoA which states if template or amended MA are being used
5) Statement of who is director, PSCs and possibly CoSec if wanted (must have for PLC)
6) Complete IN01 and file at CH along with A0A. Provide SH certs and keep records of PSC, CO sec etc, open bank account, register with HMRC