Companies

Question 1

Persons with significant control (PSC)

Answer 1

Details of PSCs must be provided to Companies House. In general, PSCs are shareholders with over 25% of shares.

Question 2

Advantages of incorporating as a company

Answer 2

• limited liability
• minimised risk
• gives formal structure for the business to run
• easier to raise finances through the issue of shares/ loans because a floating charge can be granted
• Potential for return on investment through dividends

Question 3

Disadvantages of incorporating as a company

Answer 3

• for small private companies where the directors and the shareholders are the same people, the effective separation of ownership is not achieved
• high levels of formality
• Public disclosures are necessary

Question 3

Disadvantages of incorporating as a company

Answer 3

• for small private companies where the directors and the shareholders are the same people, the effective separation of ownership is not achieved
• high levels of formality
• Public disclosures are necessary

Question 4

Public company, minimum share requirement

Answer 4

£50k

Question 5

Minimum share holder requirement for PL and PLC

Answer 5

1

Question 6

Minimum share holder requirement for PL and PLC

Answer 6

1

Question 7

Minimum director for PL v PLC

Answer 7

PL- 1
PLC- 2

Question 8

Is a company sec required for a PL v PLC

Answer 8

PL- no
PLC- yes

Question 9

Minimum share capital for PL

Answer 9

at least 1 share, could be 1 p

Question 10

Can a PL v PLC start staring without a certificate?

Answer 10

PL- no, certificate of Incorporation s15(4)
Can start trading as soon as it is incorporated

PLC- yes, certificate of Incorporation s15(4)
+ Cannot commence trading until a trading certificate is issued by Registrar showing that the company’s allotted share capital is not less than the minimum s761(1)(2)
Company does not need to be listed to offer shares to the public. When becoming a PLC, the company will apply to get certificate.

Question 11

When can a PL v PLC use a written resolution?

Answer 11

PL- Permitted s288 – except for removing directors or auditors from office

PLC- not permitted

Question 12

Minimum share holder requirement for PL and PLC

Answer 12

1

Question 12

Is a company sec required for a PL v PLC

Answer 12

PL- no
PLC- yes

Question 12

Public company, minimum share requirement

Answer 12

£50k

Question 12

Minimum director for PL v PLC

Answer 12

PL- 1
PLC- 2

Question 13

Persons with significant control

Answer 13

• Owns more than 25% of the shares or voting rights in the company
• Has the power to appoint or remove a majority of its board of directors, or
• Otherwise exercises ‘significant influence or control’ over the company
• All companies must maintain a register of PSCs which must be open to public inspection (s 790A – 790ZG)
• The intended purpose of the PSC register is to increase transparency so as to help combat tax evasion, money laundering and terrorist financing
• The PSC register must be filed at Companies House along with a company’s confirmation statement (annual statement confirming the company’s constitution and details)