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. Is a company seal required?
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 companies ID so to speak. You can change the companies 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 companies 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; the appointment of a new director or secretary; an officer's resignation from the company; 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 3 working hours. Although this is not always possible, it does generally mean that if you placed an order before 3pm 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 companies 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 companies 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 companies 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. Private companies must have at least one director, one of whom must be an individual person (as opposed to another company). A private company is not required to have a secretary but can choose to appoint one if they wish. A sole director may also be the company secretary.
Public limited companies must have at least two directors, one of whom must be an individual person and a company secretary. The company secretary must be formally qualified.
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. Is a company seal required? 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, a form 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.
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.