A Complete Guide on Incorporating a new Company in UK

Confirmation Statement A   is a document to be submitted to the Companies House annually to ensure that the company’s business details are up to date. The confirmation statement mostly requires updates relating to a company on the following headings:

• the details of your registered office, directors, secretary, etc.
• your statement of capital and shareholder information
• your SIC code (the number that identifies what your company does)
• your register of  People with significant control (PSC)

While there are separate forms to reflect various changes in the company through separate forms (for example, AP01 for director appointment, PSC04 for change in details of PSC, CH01 for change of director’s details, and such). But to reflect changes relating to the following, the filing of a confirmation statement is a must:

• Change in Standard Industrial Classification Code (SIC Code)
• Statement of capital
• Share transfer
• Shareholder information
• Exemption from keeping a PSC register.

The Companies House requires the submission of confirmation statements every year, without fail, even if the information that was being reported remained the same. As suggested, a company’s confirmation statement must be filed at least once a year- but can be filed multiple times as per the company’s requirement. If a confirmation statement is filed before the company’s review period ends, the new 12-month review period will start from the date of confirmation statement filing.

If the company wishes to file a confirmation statement on 10 July 2023, the new due date to file another confirmation statement will be 10 July 2024 (not 1 January 2024).

Directors of a limited company are legally held responsible for submitting accurate annual accounts within the statutory filing deadline. A limited company account must strictly adhere to the Financial Reporting Council (FRC) accounting standards.

The first annual accounts must be delivered to Companies House within 21 months of incorporation. After the first year, accounts for Companies House will normally cover 12 months and should be delivered by 9 months after the accounting reference date (ARD).

Dormant companies only need to prepare accounts with a balance sheet and notes about the accounts. The company’s status as dormant must be informed to the HMRC for Corporation Tax purposes.

The company name change is either an attempt to correct an existing error or a part of a re-branding. Within the purview of the Companies Act 2006, the company’s name can be changed through either of these methods:

• By passing a special resolution

A special resolution must be passed before initiating the process by securing approval of the new name. A special resolution can be passed either at a general meeting or by a written resolution. For a special resolution to be passed, a majority of at least 75% of members must vote in favour of it.

• With provision in the Articles of Association (AOA)

If the company was incorporated with model articles, one must obtain shareholders’ approval by passing a resolution to change the company name.

After the approval is received, the associated form (NM01 or NM04) must be filed in the Companies House along with a copy of the mentioned resolution. The most efficient way to send these documents to the Companies House is through the online process, which is also less time-consuming. When these documents are filed and approved, the Companies House shall issue a Certificate of Incorporation on Change of Name.

Part 5 of the Companies Act 2006 mentions the fulfilment of following condition before proceeding with the name change of a limited company:

• the company name must not be against the law,
• the company name must not be offensive,
• The company name must not suggest a connection with the UK government, a devolved administration, a local authority, or a specified public body unless that body has approved the name,
• The company name must not be the ‘same as or too similar to an existing name on the register,
• Only certain characters, signs, symbols, and punctuation can be included,
• The company name, including the ending, must not contain more than 160 characters, including spaces.

A director is an individual who is legally held responsible for major decisions relating to a company. Every limited company must have at least one director. If a limited company has only one director, who must be a human, not another company. A company director can be appointed during company formation. After incorporation, director appointments must be carried out using a formal process. The director should sign a letter of consent confirming their wish to act as a director for the company; legally, most members must approve the appointment of a new director by passing an ordinary resolution.

Once the appointment has been made, the AP01 form (for appointment of individual director) and/or AP01 form (for appointment of corporate director), including the followings details, must be filed to the Companies House within 14 days of appointment:

• Company name
• Company Registration Number (CRN)
• Date of appointment of new company director
• Title, full forename, surname, including any former name of the director
• Date of Birth
• Residential address of the director
• Service address
• Occupation
• Nationality
• Registered name and the number of corporate director’s, registered office, registration place, and legal form for the corporate director.

Similarly, the directors can resign or be removed from the directorship before the end of their term after the company incorporation. However, the process must be guided by one of these processes:

• Voluntary resignation by the director
• Removal by ordinary resolution
• Retirement by rotation
• Disqualification by the court or other authorized authority
• Removal under the company’s Articles of Association (AOA)

The Companies Act 2006 requires approval by the officer before the director’s removal. The remaining director’s must notify the Companies House within 14 days of a director’s removal, retirement, and resignation. TM01 form is used for the termination of individual or corporate directors. Similarly, the TM02 form is used for the termination of the secretary.

Share allotment is one of the major ways for a registered company to raise new capital. Other alternative methods like business loans from banks/institutions/individuals or selling the company’s assets can also be exhausted. However, share allotment is one of the most reliable methods to raise money for business finance operations.

In a private company, the share allotment must be done in a way that is not regarded as an invitation to the public to subscribe for shares. A board resolution must be passed before initiating the allotment process, followed by filing the SH01 form in the Companies House. The Sh01 shall consist of the following details:

• Company registration number (CRN)
• Company name
• Date of allotment
• Type of share (ordinary or preference)
• Currency of share (sterling/euro/dollar)
• Number of shares allotted
• The nominal value of each allotted share
• Amounts paid and unpaid per share
• Description of the consideration (if not cash)
• Statement of capital for each share class that clarifies the total number of shares, the aggregate nominal value of company shares, and prescribed particulars of rights attached to shares in the class.

Share transfer  is one of the major ways for a registered company to raise new capital. Other alternative methods like business loans from banks/institutions/individuals or selling the company’s assets can also be exhausted. However, share allotment is one of the most reliable methods to raise money for business finance operations.

When an existing share is transferred to new shareholder(s), AML verification of new shareholders is a must. The new shareholder must pay a stamp duty tax if the share transfer involves a monetary value. However, an exemption certificate must be completed if the value of the sale is less than £1000, and it is not necessary to inform HMRC about the transaction. But, if the value of the transaction is more than £1000, the stock transfer form must be sent to HMRC within 30 days from the effective date of transfer to get approved and stamped.

A stock transfer form (J-30 form) includes the following:

• Company details
• Consideration
• Share value and type
• Current and future shareholders’ information
• Stamp duty declaration (if required)

For incorporation of any company under the Companies Act 2006, the Companies House requires a UK address as the company’s registered office address. Statutory forms and correspondence from the HMRC and other government agencies are sent to the registered office address. Further, the Companies House requires notification of a change of registered address of the company every time after each change through AD01 form filing. The details provided through the form are publicly available to promote transparency within the UK territory.

Further, the change in service address of the director/ secretary/ shareholder should also be notified to the Companies House after each change.

Company dissolution consists of striking off a company from the Companies House registrar. A company can initiate the process of voluntary strike-off if it:

• Has not traded any stock in the last 3 months,
• Has not changed its name in the last 3 months,
• Is not threatened with liquidation,
• Has no agreements with creditors.

If one of these conditions is not met, the company must initiate a voluntary liquidation process.

To apply for dissolution of a limited company, a DS01 form must be filed to the Companies House, which must be signed by a majority of the company’s directors.

A certificate of good standing certifies that a company’s details are kept up to date, that legal compliance is obeyed on all state registration fees and is legally permitted to engage in business activities in the state. The certificate is also known as a certificate of existence, certificate of status, or even a state-specific name.

A certificate of good standing is not a business license, which must be obtained to conduct business legally. When a business needs to provide legal/formal documents to prove its continuous, unbroken existence and has complied with all statutory filing requirements since its inception, one can acquire a good standing certificate. The Companies House provides the certificate for any UK- registered private limited company upon fulfilment of the criteria mentioned above.