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No 3 Docs for Formation of Company

No 3 Docs for Formation of Company

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Published by: roukaiya_peerkhan on Feb 04, 2012
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The documents necessary, and the procedure to be followed, inregistering a public limited company under the provisions of theCompanies Act 2006.
Section 7 Companies Act 2006 (CA) sets out the method for forming a company, which is that oneor more persons must subscribe their name to a
memorandum of association
and comply with therequirements of the provisions of the Act as to registration. Under s.9, the
memorandum of association
must be submitted to the companiesregistrar together with an
application for registration
, which in turn lists other documents that must be submitted. Application may bemade in hard copy or electronically. As a result the following documents are required to besubmitted.(a)INOI Form This form states the proposed company’s name, the proposed registered office and whether theliability of the members are limited (if so by share or guarantee)Although the 2006 Act only requires the memorandum and application for registration to besubmitted, s.9 sets out other documents as well as the specific information that must be deliveredto the registrar when an application for registration is made.Section 9 provides that in
cases the application for registration must state:– the company’s proposed name;– whether the company’s registered office is to be situated in England and Wales (or Wales), inScotland or in Northern Ireland;– a statement of the intended address of the company’s registered offi ce (that is, its postaladdress as opposed to the preceding statement confirming the jurisdiction in which thecompany’s registered offi ce is to be situated);– whether the liability of the company’s members is to be limited and if so whether it is to belimited by shares or by guarantee;– whether the company is to be a private or a public company(b)
The memorandum of association
Although the 2006 Act retains the previous requirement for individuals wishing to form a companyto subscribe their names to a memorandum of association it nonetheless significantly reduces theimportance of the memorandum and as a consequence it is no longer possible to amend orupdate the memorandum of a company formed under the 2006 Act. Nonetheless thememorandum of association, which must be in the prescribed form, remains an important,document to the extent that, as required by s.8, it evidences the intention of the subscribers tothe memorandum to form a company and become members of that company on formation. Alsoin relation to a company limited by shares, the memorandum also provides evidence of themembers’ agreement to take at least one share each in the company.(c)
 Articles of Association
 The articles govern the internal management and organisation of the company. The articles aresecondary to the memorandum - if there is conflict between the articles and the memorandum,the memorandum prevails. Companies (Tables A - F) Regulations 1985 provides a model set of articles for a company limited by shares.(d)
Statement of capital and initial shareholdings
 This document is required where the company is to have a share capital. Alternatively astatement of guarantee is required where that is not the case (CA 2006 ss.10 & 11 set out thedetailed provisions in these regards).
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 A statement of the company’s proposed officers
Section 12 explains that this requirement relates to:any person/persons who are to be the first director or directors of the company
the person/s who is/are to be the first secretary.(f)
 A copy of any proposed articles
As the model articles apply by default this requirement operates to the extent that the companydoes not intend to use the model articles.(g)
 A statement of compliance
 This requirement to the effect that the rules relating to registration have been followed is as setout in s.13. Such a statement does not need to be witnessed and may be made in either paper orelectronic form. Under s.1068, the registrar is authorised to specify the rules relating to, and whomay make, such a statement. Section 1112 makes it a criminal offence to make a false statementof compliance, as is the case in relation to all documents delivered to, or statements made to, theregistrar. The appropriate fee must accompany the foregoing documents and once the registrar is satisfiedthat the requirements of the Act have been met, he shall issue a certificate that the company isduly incorporated. As previously, once issued the certificate is conclusive evidence that therequirements of this Act as to registration have been complied with and that the company is dulyregistered under the Act.(h) Fee £50
Certificate of Incorporation
If the Registrar is satisfied that the registration requirements have been complied with, it will issuea
certificate of Incorporation.
 The certificate of Incorporation is as if the birth certificate of thecompany. The Registrar’s certificate is conclusive evidence that the company has been validly incorporatedon the date stated in the certificate.Case: Jubilee Cotton Mills V LewisFacts: The certificate was dated 6 January although it was signed on 8 January. On 6 January thedirectors allotted shares but the allottees refused to pay, arguing that the company did not existon that date.Held: The date of certificate was conclusive as to the date of Incorporation of the company. Theallottees had to pay for the shares.
NB: prior to the certificate of incorporation
1.The company does not legally exist2.The promoters are personally liable on all contracts entered into (even in the name of thecompany)3.The company cannot ratify a contract made before it is incorporated4.Contracts are known as per-incorporation contracts.
Trading Certificate
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Although every company is in existence as a legal person as from its date of incorporation, a
public company
cannot do business or exercise any borrowing powers unless it has obtained the
certificate of entitlement to do business
also known as the
Trading Certificate
from theRegistrar. To obtain the trading certificate, the public company must deliver to the Registrar a statutorydeclaration in the prescribed Form signed by a director or secretary stating;(i)That the nominal value of the company’s allotted share capital is at least $50,000.
 That each allotted share is paid up to at least
on the nominal value and the
wholeof any premium
.(iii)That the preliminary expenses of the company and who has paid or is to pay, them.
 That any benefits given or intended to be given to
It is an offence for a public company to;(a)do business or exercise borrowing powers(b)to enter into transaction with any third party.If it does not have the Trading Certificate.Private company can commence trading immediately on incorporation.
Changes in a company’s status
A company may initially register as one type of company but it may wish to change to anothertype.E.g. a private company may wish to change to a public company because it has grown and wishesto offer its shares to the public.
Re-registration of private company as public company (Sc 43- 47) CA 85
A private company may re-register as a public company if:(i)A special resolution is passed for such re-registration.In such circumstances, the company’s memorandum of Association is altered so that it states thatthe company is a public company and other alterations are made to comply with the requirementsrelating to public company as required by CA 85. The special resolution requires a majority infavor of at least
of those present and
21 days
notice should be given voting.(ii)An application for the purpose in the prescribed form and signed by a director orsecretary of the company is delivered to the Registrar accompanied by;(a)Copy of the amended memorandum of Association and Articles of Association.(b)Copy of the company’s Balance Sheet made up to date not more than 7 monthsprior to the application together with the auditor’s report.(c)A Certificate from the company’s auditors that the Balance Sheet shows thecompany’s net assets to be not less than the aggregate of its called-up sharecapital undistributed reserves, and(d) A statutory declaration by a director or secretary that the re-registrationrequirements have been complied.
The procedure, to be found at CA 1985, s. 43, is as follows:1
 The members pass a special resolution that the company should be re-registered as a plc.
 They may also need to pass an ordinary resolution increasing the authorised share capital to atleast £50,000 if the company’s authorised share capital is less than that figure.
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