According to the Companies House statistics published in CompleteFormations.co.uk, May 2010 saw 28,900 companies being established in England, Wales and Scotland. The United Kingdom witnesses approximately 300,000 business company formations every year. For a new company set up, the entrepreneur has to complete several formalities, including submission of documents (the Memorandum and Articles of Association and form IN01) and paying the registration fees of (GBP)15 or (GBP)20 (according to the process of registration opted). The Memorandum of Association is of primary importance and needs to be filled carefully.
New Company Set Up: Memorandum of Association
Failure to submit the Memorandum of Association in the appropriate format can lead to rejection of the registration form. Therefore, a new company, in the process of being set up, has to be very careful about following the correct processes. Some of the information that needs to be included in the form are:
Registered address: The company location has to be mentioned clearly in the Memorandum because any communication from Companies House will arrive at the mentioned address. Notices, summons, writs are dispatched to the official address registered at the Companies House.
Business objectives: Company objectives refer to:
* The main object clauses
* Clauses governing the regular functioning of the company
The objects clause must comprise all possible actions that the company plans to undertake in order to achieve the objectives.
Initial member subscription: The Memorandum must include a clause involving the initial company members. This clause is supposed to state the names of each member, their mailing addresses and a short description of who they are and what they mean for the company.
Additionally, in case of a limited company formation, the company needs to mention ‘limited’ or ‘ltd’ as part of the name of the proposed organization. One cannot dispense with this last word unless special permission has been obtained on grounds of unlimited liability of the managerial committee members or shareholders.
Prior to registering a company, entrepreneurs must carry out a name check in the Companies House name index to ensure that the proposed name does not match any other on the list. This too, will lead to the registration being declined.
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