Q. What is a Limited Company?
Q. What is the difference between a limited
company and a plc?
Q. What are the benefits of
a Limited Company?
Q. What responsibilities will
I have towards Companies House?
Q. How long does it take to
form a company?
Q. Can I choose any name I want for my company?
Q. What is a certificate of incorporation?
Q. What are Memorandum and Articles of Association?
Q. On which documents must my company name
be shown?
Q. Where must my company name be displayed?
Q. How many officers are required?
Q. Can anyone be a company director
or secretary?
Q. Does a company have to have
more than one shareholder?
Q. Do I need a company seal?
Q. Does Swift Formations provide First
Minutes?
Q. Does Swift Formations provide share
transfer forms?
Q. What
is my accounting reference date?
Q. Can I change my accounting reference
date?
Q. What are the authorised shares?
Q. How do I issue more shares?
Q. What if I no longer need my company?
Q. What is a registered office?
Q. Can I change my registered office?
Q. Does Swift Formations offer a registered
office service?
Q. Do I need to be VAT Registered?
Q. What is included in the Formations package?
Q. Why must I register to use Swift
Formations?
Q. What if Companies House reject my application?
Q. Can I use Swift Formations to manage
my existing company?
Q. What are the IR35 tax rules?
Q. How do I place an order?
Q. What is a Limited
Company? Back to top
A. A limited company is a separate entity created by incorporation
at Companies House. Its profits, losses, assets and liabilities are
its own. The company is owned by its members (the shareholders) and
run by the director (or directors) whose assets are protected from
loss if the business should fail. This is sometimes referred to as
limited liability. Because a company has a life of its own the business
can continue despite the resignation or death of any directors or shareholders
and the sale of the business or the introduction of outside investors
are simplified. Reasons for wanting or needing a limited company may
include ownership of property, obtaining outside finance, taxation,
status and protection from risk.
Once incorporated Companies House issue a certificate and company
registration number. This becomes the company's ID so to speak. You
can change the company's name at any time but you still keep the registered
number.
Q. What is the difference
between a limited company and a plc? Back
to top
A.
A PLC is a public limited company and a limited company is a private
limited company. Private limited companies are much more common than
public limited companies.
A plc may be listed on the Stock Exchange or the Unlisted Securities
Market but does not have to be. A private limited company cannot be
listed.
Before it can start to trade, a plc must have at least £50,000
worth of shares issued and at least 25% of the value must have been
paid. A private limited company can have just one share issued.
A plc must have at least two directors and a secretary. A private limited
company may have just one director and a secretary.
Q. What
are the benefits of a Limited Company? Back
to top
A.
First and foremost, the principal benefit of trading via a limited
company has always been the limited liability bestowed upon the company's
officers and shareholders. As a sole trader or other non-limited business,
personal assets can be at risk in the event of a failure of the business,
but this is not the case for a limited company. As long as the business
is operated legally and within the terms of the Companies Act, directors'
or shareholders' personal assets are not at risk in the event of a
winding up or receivership.
Many of the costs associated with managing and operating a limited
company are not much greater than with a non-limited business.
There is no obligation for a limited company to commence trading within
any set time period after its incorporation. This means that the formation
of a limited company is one simple and low cost method to protect a
business name. Whilst this does not in itself give any rights to use
of the business name, many clients form companies in anticipation of
future development of new businesses or in order to protect the limited
company name of an existing non-limited business for the future. No
two limited companies can exist with exactly the same name.
Q. What
responsibilities will I have towards Companies House? Back
to top
A. Every company director has a personal responsibility to ensure
that statutory documents are delivered to the Registrar of Companies
as and when required by the Act. In particular Accounts; Annual returns
(Form 363); the appointment of a new director or secretary - use Form
288a; an officer's resignation from the company - use Form 288b; Changes
in an officer's name or address or any the other details
Q. How long
does it take to form a company? Back
to top
A. Our
system uses the Electronic Filing facilities at Companies House. This
means that whatever the time of day, when you place an order on
our website your request is sent instantly to Companies House for processing.
Companies House then aim to respond to electronically filed documents
within 4 working hours. Although this is not always possible, it does
generally mean that if you placed an order before midday on a normal
working day we can have your company incorporated by the end of that
same day. Our best turnaround time to date has been a company formation
completed in less than one hour.
Q. Can I choose any name
I want for my company? Back
to top
A. It is important to
check that the name you want is acceptable to Companies House.
Briefly, the restrictions are that:
- You cannot register
the same name as another company;
- The use of certain words is restricted;
and
- Names likely to cause offence are not allowed.
It is also important to check whether your chosen name is similar
to any other names already on the register. If your chosen name is
too like another name, an objection could be made within the 12 months
following the incorporation of your company and you could be directed
by the Secretary of State to change the company's name
Certain words and phrases are classed as sensitive
by the Department of Trade and Industry. If this is the case you
will be prohibited from
using them or you might have to justify you are entitled to use the
name. For more information on this subject see Companies House notes
CHN2, CHN3 & CHN11.
Q. What is a certificate
of incorporation? Back
to top
A. This is the Official
certificate that Companies House issues when a company is incorporated.
It will include the date of incorporation,
your company name and registered number. We will email this to you
along with any other relevant documents
Q. What are Memorandum and Articles of Association? Back
to top
A.
These are the rules for running the company. They show what the company
can do by law, where its registered office
should be, how much
share capital can be issued etc. Unless you have requested differently
your memorandum and articles will state that the company's registered
office will be in England or Wales and your authorised share capital
is £1,000 for limited companies and £50,000 for PLC's.
Your bank will require a copy of your memorandum and articles of association
when you open an account for the company.
Q. On which documents must
my company name be shown? Back
to top
A. The company must
state its name, in legible lettering, on the following:
- All the company's business letters;
- All its notices and other official
publications;
- all bills of exchange, promissory notes, endorsements,
cheques and orders for money or goods purporting to be signed by,
or on
behalf
of, the company;
Q. Where must my company
name be displayed? Back
to top
A. Every company must paint
or fix its name on the outside of every office or place in which
its business is carried on - even if it is
a director's home. The name must be kept painted or fixed and
it must be both conspicuous and legible.
Q. How many officers
are required? Back
to top
A. A private limited company must
have at least one director and one company secretary Formal qualifications
are not required, but unless
there are two directors, a person cannot be the sole director
and secretary.
A PLC company must have at least two directors and the company
secretary must be qualified to hold the position.
Q. Can anyone be a company
director or secretary? Back
to top
A.
Anyone, of any nationality anywhere in the world can be appointed
director unless:
- They have been disqualified by court order
- They are an un-discharged
bankrupt
- They are a foreign national subject to restrictions imposed
by the UK Government.
Q Does
a company have to have more than one shareholder? Back
to top
A.
Since 14th July 1992 a private company limited by shares can be registered
as, or become, a single member (shareholder) company. This
means that a single member now has no personal liability for the debts
of a company beyond their share holding.
Q. Do
I need a company seal? Back
to top
A. Changes to the Companies Act in 1989 mean that a seal is no longer
required and therefore our basic and standard packages do not include
a seal.
Q. Does Swift Formations
provide First Minutes? Back
to top
A. Companies formed using our online system are formed with the correct
offices and subscribers (shareholders) from incorporation. This means
that there is no need for the commonly referred to "First Meeting" to
resign the nominee officers. This also saves time when opening a
bank account as it will always be the correct officer details displayed
on a company search by the bank.
Q. Does Formations
provide share transfer forms? Back
to top
A. Companies formed using our online system are formed with the correct
share holders from incorporation, so there is no need for initial
share transfer forms. Importantly, this also means there is no need
to pay stamp duty on the transfer of any shares either. However,
Form 88(2) is available for download from the Companies House website,
should you wish to issue any further shares in your company after
incorporation.
Q. What
is my accounting reference date? Back
to top
A. The accounting reference date is the date in each year to which
accounts will be drawn up. The date depends on the date of incorporation
as it is the last day of the month in which the anniversary of incorporation
falls. For example, if your company is incorporated on 2 July this
year, the accounting reference date will be 31 July, and its first
financial year must end on 31 July next year (or within seven days
of that date).
Q. Can I change my accounting
reference date? Back
to top
A. You may change it by sending Form 225 (available for download
from companies House website) to the Registrar. You must do this
during the accounting period affected by the change or during the
period allowed for delivering the associated accounts.
Q. What are the authorised shares? Back
to top
A. This is the number of shares your initially authorise your company
to issue to shareholders/subscribers. Usually a share issue of 1000
with each share valued at £1 is used.
It is worth noting that although you authorise 1000 shares, if only
1 share is issued to one person, that person becomes 100% shareholder
in the business.
Q. How do I issue more shares? Back
to top
A. If you wish to issue further shares up to the authorised share
capital form 88(2) should be completed and sent to the Registrar
of Companies.
You can increase your authorised share capital by passing an ordinary
resolution at a general meeting. A copy of the resolution and Form
123 detailing the proposed increase must then reach Companies House
within 15 days of being passed.
Q. What if I no longer need
my company? Back to top
A. Private companies that have not traded or otherwise carried on
business for at least three months may apply to the Registrar to
be struck off the register.
Q. What is a registered
office? Back to top
A. The registered office is an address in England or Wales (or Scotland
if your company is registered there) where documents can be delivered
to the company.
Companies House uses the Post Office address file to verify addresses;
so, to avoid delays, please ensure that your proposed registered office
address is recognised by the Post Office and always give the correct
postcode on forms sent for registration.
Q. Can I change my registered
office? Back to top
A. If a company changes its registered office address the new address
must be notified to Companies House on Form 287.
This can be done online using our website free of charge, as often
as you need to.
Q. Does Swift Formations offer a registered office
service? Back to top
A. Yes, we are able to offer this service at a cost of £49.99
per annum. To take advantage of these services just select the option
presented to you when placing your order (at the stage where you
enter the company name you wish to Incorporate).
Q. Do I need to be VAT Registered? Back
to top
A If you wish to register for
VAT, it is a simple procedure. All you have to do is tick the option
when ordering
your company and we will
proceed to register your company with the UK VAT office. If this is
on a voluntary basis, you must provide proof of the company’s
intention to commence trading. In any case, the company must register
for VAT once its turnover reaches £58,000.
In general if you are selling to the public your prices will be lower
if you do not charge VAT. If you are selling to business the VAT will
not affect the cost to the business, and you will be able to reclaim
all your VATable costs. (Most things apart from Rent, Rates and Salaries)
Q. What is included in the
Formations package? Back
to top
A. Swift Formations offer several levels of registration packages,
along with a number of other options available at the end of the
formation process. More information on these can be found on our
Services page. However, all levels of service provide you with your
complete company formation, certificate and Memorandum and Articles
documents to start trading.
Q. Why must I register to use Swift Formations? Back
to top
A. Swift Formations provide more than just a simple company formation
service. We also provide you with the facility to file 288a, 288b,
288c and 287 forms for your company direct with Companies House.
These services are all provided free of charge whether your company
was formed with us or not.
You can also use our service to form as many companies as you want
and have them all allocated to your account with this.
All these services mean that we need to be sure the right person
is making modifications to the right company, hence the need to register.
Q. What if Companies House reject my application? Back
to top
A. If Companies House reject your application our system will automatically
email you informing you of this. You can then log back into our system
and make the necessary modification to your application and resubmit
your forms back to Companies House.
This must be done within 3 days as Companies House keep the document
ID process open for each failed application for 3 days only.
If you decide not to continue with the application after 3 days you
must then log into our system and cancel the application. Any costs
associated with that application are placed on your online account
to use for any other services. If you wish to have them refunded
to your card please contact us.
Q. Can I use Swift Formations
to manage my existing company? Back
to top
A. Yes, you can use our system to manage any document services we
have to offer whether you formed you company with us or not.
First register online and when complete go to the Companies House
area of our website and complete the Document Authentication process.
Once Companies House receive your requested authentication code (usually
5 working days) you can start using our service to manage your existing
companies.
Q. What are the IR35 tax
rules? Back to top
A. IR35 was first proposed in the 1999 Budget. The purpose of the
IR35 rules is to remove opportunities for the avoidance of tax and
Class 1 National Insurance Contributions (NICs) by the use of intermediaries,
such as service companies or partnerships, in circumstances where
an individual worker would otherwise be an employee or an office-holder
of the client. IR35 is most applicable to workers in the IT, telecoms,
engineering, oil, gas, offshore and pharmaceutical industries and
to interim managers. However, the legislation is such that any personal
service company may be affected. If engagements are deemed to be
within IR35 then the tax and NI burden increases by approximately
15%.
Q.
How do I place an order? Back
to top
A. Simply us our fully
automated online system alternatively you can use our on-line order
form. Once we have received all the information
required together with the relevant payment, we will process your order.
The above information is not intended to be a legal or comprehensive
interpretation. Professional advice should be sought in specific circumstances.
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