To incorporate a company you are required to complete the form IN01 and provide Companies House with the Memorandum of Association and the Articles of Association of the proposed company. To complete the form IN01 you will require the following information:
Company Name
When you are setting up a company you are required to provide Companies House with the company name. The company name must be unique and end with Ltd if it is a private company or Plc if it is a public limited company; in addition, the Company Business Names Regulations 1981 restrict the use of certain words that suggest a connection to the Royal Family or the government. If this is the case you must make a written application to the secretary of state for approval.
In addition, the regulations prohibit the use of offensive words in company names.
To check if you have a unique company name, please visit www.companieshouse.gov.uk. Companies House provides a free names check service to enable business owners to check the availability of their company name.
Registered Office
Each company is required to provide Companies House with a registered office address, the registered office address is open to the public and therefore enables documents to be served on the company at the registered office. This is normally the head office address of the company although companies who do not have commercial premises will use a home address.
In addition to having a registered office, each director of the company must provide Companies House with their residential address. In view of recent events involving protestors going to the homes of directors, the Companies Act 2006 makes provision for the residential address of a director to be kept private and for directors to nominate a service address for important documents (normally the registered office of the company) however credit companies and certain key businesses can have access to a directors residential address.
Officers of the Company
When making an application to incorporate a company, you are required to provide Companies House with the details of the persons who are to become the first directors and if required, the first company secretary (for more information on company secretaries please visit www.companieshouse.gov.uk).
A company must have at least one natural person as a director, who must be at least 16 years old, have mental capacity and must not have been excluded from being a director e.g. through bankruptcy. If you desire, another company can be a director of the company you are incorporating.
Shares
When incorporating a company you must declare what the capital of the company is, the class of the shares and who owns the shares.
Most companies will start by having a share capital of 1000 shares of £1. This means that the company has £1000 of shares available to issue to its shareholders. When incorporating the company you may wish to think about having different share rights attached to different classes, for example:
The share capital of 1000 shares can be split into different share classes; these are often referred to as alphabet shares. 1000 ordinary shares become:
200 Ordinary A Shares
200 Ordinary B Shares
200 Ordinary C Shares
200 Ordinary D Shares.
200 Ordinary E Shares
Different rights can then be attached to the different share classes, for example you may wish to issue shares that have full voting, full dividend and full capital rights in the company (Ordinary A Shares below) but you might want a small investor to have limited voting rights, therefore you can issue that shareholder with shares that have restricted voting rights (Ordinary B Shares below).
200 Ordinary A Shares – Full Voting Rights, full Dividend and Capital rights Full
200 Ordinary B Shares – Dividend and Capital rights only, no voting rights.
Once you have decided what the share structure of the company is, you can then issue shares to the shareholders.
Constitution of the Company
It is a requirement of the Companies Act 2006 that each company has Articles of Association and Memorandum of Association. Whilst the Companies Act 2006 has reduced the importance of the Memorandum of Association which is now largely pro-forma, the Articles of Association have increased in their importance.
The Companies (Model Articles) Regulations 1998 provide model Articles of Association for use by both private and public limited companies. When you incorporate your company you must declare if you are using the model articles, amended model articles or bespoke articles.
At Edward Hands and Lewis we can advise you on the best form of Articles of Association and if required we can draft you bespoke Articles of Association to ensure your company’s constitution is drafted for the maximum benefit of your company.
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