Table A contains the rules that apply to companies by default. The Companies Act 1985 states that the rules laid out in Table A automatically apply to companies unless they have been modified in writing. Therefore, any rule that a company does not like may be altered or excluded either before incorporation or after subject to voting.
A witness may be a Commissioner for Oaths; Notary Public; Justice of the Peace; or Solicitor.
The objects state what a company may do. For instance the objects may say 'To trade in tractors'. If the company were to trade in sheep this activity would be outside the scope of the company and thsu contracts may be void. To get around this problem (its is designed to protect shareholders who may want to invest in a tractor company but not a sheep company) a general objects clause may be drawn up of the form: The objects of the company is to carry on business as a general commercial company.
The promoters are the people who give 'birth' to the company or form it initially.
This is the legal procedure that must be undertaken to form a company.
The following information must be supplied to Companies House; the information is then made available to the general public:
This document must be submitted annually within 28 days (to avoid fines) after the date of incorporation or at an agreed date. It updates the following information:
This really concerns the shareholders in the company and means that, should anything go wrong, their liability (money that they may lose) is limited to the value of their shares. For example: one shareholder owns 10 £1 shares in a company; this shareholder's liability is exactly £10. The shareholder's personal assets cannot be touched even if the company owes money it cannot repay.
On formation share capital is issued. For instance: £100 of authorised share capital at £1 per share. The issued share capital may however be only 2 shares; thus, the total share capital is £2.
Authorised Share Capital & Issued Share Capital
Authorised share capital is the amount of share capital that the shareholders agree can be issued at some time. For instance the company may have an authorised share capital of £100; however, the issued share capital may be only 1 share of £1. This means that the other 99 shares can at some point be issued to shareholders.
Authorised share capital can be increased if the shareholders authorise it.