Limited Company Formation

Legal Changes: This Limited Company Formation Kit has been updated to include the Companies Act law changes which occurred on 1st October 2009. 

The Limited Company Formation Kit shows you how to create a limited company efficiently, leaving you free to concentrate on making a success of your new business.

Incorporation as a limited liability company is the preferred structure for thousands of successful businesses.

Lawpack's Limited Company Formation Kit is also available as a "Download Now" Limited Company eKit to get your business up and running as quickly as possible.

The Limited Company Formation Kit explains exactly what a limited company is, what it can mean for your business and it tells you everything you need to be able to set up a limited company right now.

For a fraction of the cost of an 'off-the-shelf company' the Limited Company Kit will give you everything you need to set up your own limited company (with a minimum of one director), with a registered office in England, Wales or Scotland.

The Limited Company Formation Kit includes copies of all the necessary Companies House forms and a guidance manual that takes the reader step-by-step through the legal process and provides useful background information and advice.

Limited Company Kit Legal Note:

The contents of this Limited Company Kit have been approved under English and Scottish laws by H M Williams Chartered Accountants.

This Limited Company Kit cannot help you to form a company limited by guarantee.

Legal Changes: The Product Update Service for this title has been updated with the law changes of 1st October 2009. 

12/02/2010 - Further Information on Completing Form IN01

Section F4 ‘Statement of capital’ on Form IN01

There has been some confusion over what wording to put at Section F4 on Form IN01.

For the majority of companies using the Model Articles of Association the wording will be as follows:

"Each share has the right to one vote.
Each share has the right to receive dividends and to vote on dividends being taken.
Each share has the right, when the company is dissolved, to a proportion of the remaining assets."

Companies House have published the following ‘Q&As’ to help:

Q. What are the prescribed particulars?

A. The prescribed particulars are defined in secondary legislation, namely the Companies (Shares and Share Capital) Order 2009. The particulars are:

(a) particulars of any voting rights attached to the shares, including rights that arise only in certain circumstances;
(b) particulars of any rights attached to the shares, as respects dividends, to participate in a distribution;
(c) particulars of any rights attached to the shares, as respects capital, to participate in a distribution (including on winding up); and
(d) whether the shares are to be redeemed or are liable to be redeemed at the option of the company or the shareholder.

Q. Where can I find information on prescribed particulars which apply to my company?

A. In most instances, rights attached to shares are subject to an agreement between the company and its members and are defined in a company's Articles of Association. In other instances, such information may be contained in a company resolution. These should always be the first points of reference when you are trying to find information on the voting rights and prescribed particulars applicable to your company.

If you are still unable to find information on the voting rights and prescribed particulars after checking the Articles of Association and any resolutions, you may want to seek professional advice.

Q. Can Companies House give some examples of the wording that will be acceptable when completing the voting rights and prescribed particulars on a statement of capital?

A. Yes, but this is limited to the simplest case of a private company limited by shares using the model articles provided in the Companies (Model Articles) Regulations 2008. Examples of the wording that could be used for voting rights, dividend rights or distributions on winding up are as follows:

"each share is entitled to one vote in any circumstances" - this wording will reflect the general legal position of one member one vote under section 284 Companies Act 2006;

"each share is entitled pari passu to dividend payments or any other distribution" - this will reflect a basic right to dividends but any dividend must be made in accordance with the Companies Act and the company's Articles of Association; and

"each share is entitled pari passu to participate in a distribution arising from a winding up of the company" - any distribution from a company being wound up will therefore operate in accordance with the law.

It is very unlikely that companies using the model articles will issue shares with capital distribution rights. Generic wording is therefore difficult to provide and companies with such shares are better placed to describe the rights attached.

It is not possible to provide standard wording in relation to redeemable shares. The issue of such shares is at the discretion of a company. If redeemable shares are issued, the directors may determine the terms, conditions and manner of redemption. The specific wording setting out the rights will be required.

If there are any amendments made to the model articles to adapt them or resolutions passed detailing share rights of a company, the examples above may not adequately reflect the share rights that must be disclosed. If the rights information is not easily obtainable from the company's articles of association or resolutions, you may want to seek professional advice.

Please note: If you are unsure about the information that you should provide you may wish to seek professional advice. Companies House cannot provide detailed guidance on this matter.

Please note: Companies House will reject statements of capital in instances where full information is not provided or where reference is made to another document for the share rights information. Some examples of wording which will result in the statement of capital being rejected are:

"please see the Articles of Association for the rights";
"rights as set out in the Articles";
"share rights are the same as those already in issue";
"not applicable";
"pari passu".