Company Law - Introduction to Incorporation

Allows most company documentation to be submitted electronically.

A document outlining the company's initial details and purpose.

A document outlining the company's internal rules and regulations.

Provides suggested forms for company memoranda and articles.

Must follow Table F of the Regulations.

A document confirming a company's legal existence.

A statement confirming compliance with registration requirements.

The fee for registering a company (currently £20).

A registrar can reject a company's registration if formed for illegal purposes.

A court can cancel a company registration due to illegal or unethical activity.

Public companies need a special certificate (s.117) to start trading, verifying minimum capital.

A company is a distinct legal entity separate from its owners.

Shareholders are usually not directly responsible for a company's debts.

A company is responsible for its own debts, not its owners

Company property belongs to the company, not its members.

A company can enter into contracts just like any individual.

Public companies require a trading certificate before operating, confirming minimum capital.

Trading without a required certificate is a crime; both company and directors face legal action.

Directors of a company in insolvent liquidation cannot manage a similar business using the same name.

Changing a company's name requires approval of 75% of shareholders' shares.

The Secretary of State can force a company to change its name if it's the same, or too similar to another, or misleading.

Specifies the location of a company's registered office in the memorandum of association.

Registered office determines which court has jurisdiction over the company in a legal dispute.

States the company's purpose(s) in its memorandum of association.

An action a company takes that is beyond the scope of its objects clause.

The principle that a company's actions outside its stated purposes are now not invalid against third parties.

A shareholder can sue to prevent a company from engaging in an activity outside its stated purposes.

A vote by shareholders requiring a simple majority to pass.

In an unlimited company, members are personally responsible for all company debts, even if it means using their own assets to pay them off.

Members agree to contribute a fixed amount to the company's assets if it goes bankrupt. This amount is called the 'guarantee fund'.

The most common type, where members own shares in the company. Each share has a set value, and members may also pay a premium.

The total amount paid to the company for the shares issued. It's a source of funding for the company.

Members of the company are only responsible for the amount they invested in the company, usually the value of their shares. They are not personally liable for the company's debts.

Ignoring the legal separation between a company and its owners, allowing creditors to hold company owners personally liable for debts.

When a law specifically allows courts to hold company owners personally liable, even though they are separate legal entities.

If a company has less than two members for more than six months, any member who continues trading can be held personally liable for the company's debts.

If a public company operates without a trading certificate, its directors can be personally liable for any losses arising from non-compliance with legal obligations.

If someone signs a document on behalf of a company with an incorrect name, they can be held personally liable if the company fails to pay.

The court can make directors contribute to a company's assets when a company is being wound up due to fraudulent activities or negligence regarding creditor losses.

A director of a company in insolvent liquidation cannot become a director of another company with the same name within five years.

This case established that companies act 1985, Section 349's provisions regarding incorrect company names are strictly enforced.

This case emphasizes that courts assume companies are separate entities from their owners, and piercing the veil isn't a light decision.

Courts usually presume that a company is a separate legal entity from its owners, meaning owners are not personally liable for company debts. This is called the 'separate legal personality' doctrine.

A company is a legal entity created by law, separate from its owners. It has legal rights and obligations just like a person.

A company is a separate legal entity, while a partnership is a group of individuals who agree to work together. This means a company's liability is limited to its assets, while partners are personally liable for debts.

A company's internal rules and regulations are outlined in a document called the 'Articles of Association'. Think of it as the company's constitution.

The company's purpose is outlined in a document called the 'Memorandum of Association'. It defines what the company is allowed to do.

Changing a company's name requires a vote by shareholders, usually 75% of the shares. The Secretary of State can also compel a name change if it's confusing or misleading.

The total nominal value of all shares a company is authorized to issue, as stated in its memorandum. This represents the maximum amount of capital the company can raise from selling shares.

A company with a minimum authorized share capital of £50,000 (at least a quarter paid up), a minimum of two shareholders, and two directors. It's listed on the Stock Exchange and subject to stricter regulations.

A company that's not a public company. It has no minimum authorized share capital, requires only one director and one member, and is not typically listed on the Stock Exchange.

A person who takes the steps necessary to incorporate a company. While not formally defined by the Companies Act, they are typically individuals who initiate and organize the company's formation.

Public companies are listed on the Stock Exchange, are subject to much stricter regulation, and must meet higher minimum requirements for capital, shareholders, and directors.

It sets a limit on the amount of money a company can raise by selling shares. This ensures that investors and creditors are aware of the company's maximum authorized capital.

In a company limited by shares, shareholders are only liable for the amount of money they invested in the company. They are not personally responsible for any further debts that the company may incur.

Whether someone is acting as a promoter of a company is a question of fact, determined by their actions and involvement in its formation. It's not a legal title that's formally assigned.

The legal documents defining a company's structure and rules. They are the "blueprint" of the company.

These include documents like the memorandum, articles, and a statutory declaration, ensuring the company's formation is legal.

Required by public companies to start trading, ensuring they have met minimum capital requirements.

The official address of the company, which determines jurisdiction in legal matters.

A registrar can refuse to register a company if it's formed for illegal activities.

A court can cancel a company registration if it's discovered that the company was formed for illegal or unethical purposes.

A company is responsible for its own debts. Shareholders are not personally liable for company debts.

A company owns its property, not the shareholders.

A company can enter into contracts just like any individual.

A public company that starts trading without a required trading certificate commits a criminal offense.

Changing a company's internal rules and regulations, as outlined in its Articles of Association. This requires shareholder approval and must be done in good faith for the benefit of the company.

This means that changes to a company's Articles of Association must be genuinely done to benefit the company as a whole, not for personal gain or to unfairly benefit specific shareholders.

The company's Memorandum and Articles of Association create a legally binding contract between the company and its members, outlining their rights and responsibilities.

While the Memoranda and Articles bind the company to its members, they don't create a contract between the company and outsiders. However, the company can incorporate these provisions into express contracts with external parties.

Any changes to a company's Articles of Association that contradict its original Memorandum will be considered void and unenforceable.