|An excerpt from Lawpack's Limited Company Formation Kit.|
Once you know the name of your limited company - the name(s) of its shareholders and the name(s) of its directors - you’re now ready to form your limited company.
Here’s a list of the company formation forms you need to form a limited company.
All of these company formation forms must be completed and then you must register your limited company at Companies House. Remember that you must be consistent with wording when referring to your limited company name on all documents filed at Companies House. Choose ‘Limited’ or ‘Ltd’, but don’t use both.
Memorandum of Association
The Memorandum of Association simply sets out the name of the limited company and who the initial subscribers (shareholders) are.
You must complete the name of the limited company and the names and signatures of the subscribers. This must be sent with Form IN01 to Companies House.
Articles of Association
The limited company’s constitution is known as its Articles of Association. Articles of Association contain the company’s regulations for its internal management.
The official title of this document used to be Table A but it’s now called ‘Model Articles’.
If you adopt the Model Articles, you don't need to submit the limited company’s proposed articles but you should indicate on Form IN01 that you have adopted the Model Articles. Just because you have adopted the Model Articles, this doesn't mean you can’t amend them but, if you do, you must pass a special resolution and notify Companies House within 15 days.
Form IN01 gives details of the limited company directors, company secretary and the address of the limited company's registered office. It also states that the limited company directors have complied with all proper procedures to form a limited company.
For those of you familiar with the old limited company formation forms, this Form IN01 replaces Form 10 and Form 12, and is the new ‘master’ form for incorporating your limited company. Although the new form is considerably longer than Form 10 and Form 12, due to the extra detail required, it's likely that a continuation sheet of sorts will be required (and this sheet is provided as a download when you purchase our Limited Company Formation Kit).
Here is an outline of what needs to go where, who needs to sign what, and we also aim to highlight the more important parts of Form IN01:
Part 1 – Company details
This is where you enter the limited company's name and its first registered office. You will also need to confirm the limited company type and confirm that the limited company name does not have any 'sensitive' words.
It's highly unlikely that you will need to tick the box so as not to include ‘Limited’ in the name. If you do want to do this, you should contact your accountant.
Also in this section of Form IN01, you must indicate what type of Articles of Association will be used. Most new companies will use the Model Articles in its entirety and tick ‘private limited by shares’ in option one. But if you require option two or three, or the Articles will be restricted, you should contact your accountant or solicitor.
Part 2 – Proposed officers
Companies House distinguish between corporate and non-corporate directors and company secretaries. Company directors and company secretaries now have more protection as they can select to use a service address rather than their residential address to show on the limited company register and at Companies House.
The company secretary (if there is one after 6 April 2008) must sign and date Form IN01. The directors must also sign and date Form IN01.
Part 3 – Statement of capital
This section of Form IN01 is where the limited company’s share capital is noted. It's also where the share types and values are entered. The Companies Act 2006 has removed the need for an authorised number of shares and only requires a note of the issued share capital.
The standard class of share capital is known as ‘ordinary shares’ and they normally have a value of £1 each for private limited companies. It's sensible that all shares are paid in full as if they are not, the limited company or its administrators could chase for the remainder at a later date.
The number of shares that the limited company has is up to you, but it's usual to have a few hundred shares. We would not recommend a value of over £4,000 as this may close avenues when you want the limited company to dissolve.
You can also specify in this section of Form IN01 any specific share rights, for example, the ordinary shares above could have voting rights and the right to receive a dividend, whereas another class of share may only have the right to receive a dividend but no voting rights. If so, you will need to enter the particulars for each non-normal share type on Form IN01.
Part 4 – Statement of guarantee
This section of Form IN01 only relates to limited companies that don't have any share capital. If your limited company does have share capital, then this section of Form IN01 can be ignored.
Part 5 – Statement of compliance
In this section of Form IN01, each subscriber must sign Form IN01 to confirm all the information on the form is correct. It's also advisable to complete the ‘Presenter information’ section in case Companies House have any queries. We would suggest that each is completed to avoid any rejections.
Finally, after completing the form you will need to send Form IN01, along with the necessary payment, and Memorandum of Association plus copy Articles if you're not using Model Articles, to the registrar at Companies House.
Make sure to take copies of Form IN01 before sending off the originals, as Companies House charge for issuing copies of submitted documents.
The registrar will then send you a Certificate of Incorporation. The limited company comes into existence from the date on this Certificate which will also show the Company Number and where it's registered.
Congratulations! You have now registered and formed a limited company.
Published on: October 11, 2010