Frequently
Asked Questions |
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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 Dolphin 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 Dolphin 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 Dolphin 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. Dolphin Formations offer three 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 Dolphin Formations? Back to top
A. Dolphin 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 Dolphin 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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