Trading activities in the UK has been success mainly due to the adoption of limited liability concept which is used for the formation of trading companies. This concept lets the trading expand by enabling the expanding of the credit, providing a reduced risk to the party inside the company at the same time.
In other words we can say that the share holding parties are not held responsible for any company debts. Debtors are not allowed to make any claim regarding the shareholder's personal assets. Thus, the only risk to the shareholders is to the investment or interest in the company they are involved with.
By registering with the Companies House, the above mentioned type of security to the party is legally formed. This registering process is known as Incorporation. This process is popular amongst many traders who are forming a trading company located in the UK using the Limited Liability Concept.
With this concept the company is able to protect its personal assets. This is an advantage for the traders because trading market is place full of fluctuations causing loss to some while giving profit to others. Investors, in the UK, are very much aware of this situation thus to provide a security to their assets they prefer to register and adopt Limited Liability Concept. The only insecurity they have is their interest on trading company.
A UK trading company, under limited liability concept, can, using dividends, issue its share holders profits. In case of taxation, adapting to the fast movement of trading company the Chancellor of the Day makes some change in rules of the company which are followed by both corporate and personal level. Dividends or profits given to shareholders is still considered as the best and secure way to tax a UK trading company, avoids any insecurity to the shareholders.
The most common type of company under limited liability is private limited trading company. Over 1 million such companies have so far registered to the Companies House. These types of companies can easily be recognized since they commonly use suffix 'LTD or 'Limited' their business names.
One requirement that every limited liability concept company in UK should fulfill is public information. Through this requirement they keep a record of their dealings with public with the Companies House. An advantage of this is that anyone can buy these records before they execute a trade with the company. It is always important especially in trading that you keep information about the company you're dealing with.
There are many websites online that cater for many UK based investors needs who are interested forming a company under limited liability concept.
The information that generally includes when forming an online company is given below:
* The documents that are asked by the Companies Act * Limited Liability Trading Company Registration * Incorporation Certificate * Statutory registration which is complete. It should include the following: Register of : Members and share ledgers Allotments and applications Transfer Debentures Directions Mortgages and charges Documents sealed and/or executed Secretaries Share certificates Companies' Articles of Association Companies' Memorandum of Association
All this is possible when you form an online limited liability trading company in the UK
After the UK limited liability company formation documents have been submitted to Companies House to register the new company Companies House will then send notification to the new registered office that the new company has been incorporated with the Certificate of Incorporation. Following confirmation that the new company has been formed the directors need to take a number of actions to start the new company on the correct footing.
Statutory Books and Registers
Following the company formation the directors have a legal responsibility to keep a set of statutory registers on behalf of the limited liability company, known as the statutory books. The statutory books to be kept include a statutory register of the appointed directors and their interests, a statutory register of members and a statutory register of charges on the company assets. The majority of company formation agents provide templates for the statutory registers
The statutory register of directors should include the full names and addresses of the directors which can be entered from the Companies House form 10 details originally submitted to Companies House when the new limited liability company details were submitted for registration. In addition the director interests should be included such as other directorships and specific interests in any company assets.
The statutory register of members is a list of the company shareholders which will include the original subscribers to the memorandum of association. This statutory register of shareholders should state the name and address of the shareholder, the number of shares issued stating the class of share if different classes are issued and the date when those shares were issued. The date the shares were issued to the subscribers to the memorandum of association would be the date the company was incorporated.
It is a legal requirement to keep a statutory register of any charges, mortgages and debentures that have been contracted by the company. The statutory register should also include the details of any assets which are the subject of those charges.
Share Certificates
After the company has been incorporated the newly formed company should issue to its shareholders a share certificate which is prima facia evidence of the ownership of those shares. There is no prescribed convention for the design of the share certificate which is an internal corporate affair. The details entered on a share certificate would be the company name, shareholder name, registered office of the company, class and number of shares with the share certificate normally signed by the issuing authority such as the company secretary.
Disclosure of the Limited Company and Name
Under the Companies Act 1985 each company must paint or affix the name conspicuously on the outside of every office and place of business even if this is the home of the director. The company must also state its name legibly on all company business letters, order forms, official publications, cheques, orders, invoices, monetary notes and receipts and on all websites.
In addition companies must also state its pace of registration e.g. registered in England and Wales or registered in Scotland and the company registration number on all business letters, order forms and websites. A company does not have to show its directors names on business letters but if it chooses to do so then all the director names must be shown. A business letter must show every directors name or none.
Annual Return
Every year Companies House will send an annual return to the company registered office with the corporate details pre-printed. This annual return is known as the shuttle form and should be signed and returned to Companies House within 28 days confirming the details are correct also enclosing the annual filing fee of thirty pounds.
Any new details or changes to the information contained on the form should be advised to Companies House on the appropriate document such as changes in registered office or directors. In many cases particularly for small limited companies there are no changes and the form can simply be signed and returned. It is important that the annual return is returned as failing to do so can and does trigger a process that would lead to the Company being listed in the London Gazette and eventually dissolved with various penalties to the directors who failed in their responsibilities.
Company Accounts
A company must both keep company accounts which start on the day of incorporation, the initial shares having been issued and paid on that day. When the accounts are completed and submitted at the end of the financial year the directors must also confirm and state that a satisfactory system of financial control has been maintained.
Unless the accounting reference date is changed and notified to Companies House the first financial year end will be the accounting reference date which is the last day of the month 12 months after the date of incorporation or within 7 days of this date. The company accounts have to be made up to this date. The company accounts year end date can be changed by the company only if application is made to notify that change before the notified filing date for the accounts.
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