Companies House is a government run agency sponsored by the Department for Business Energy and Industrial Strategy. Its main role is to incorporate and dissolve limited companies, and store information for registered companies which is available to the public on-line.
Set out below are some of the issues we commonly advice our clients on.
What services does Companies House provide?
- search for company information free of charge
- search disqualified directors.
- file company information on-line.
Why incorporate a company?
A company is a separate legal entity and has a separate identity to those of its owners and/or directors.
Benefits of a limited company?
There are many benefits to running a company as a separate legal entity. From a shareholder’s point of view, the shareholder’s liability is limited to the number of shares they hold and the value of those shares.
Directors also enjoy limited liability. They have no personal financial liability to the company, unless they are found to have breached their directors duties to the company, when they may incur personal liability penalties. They might also face disqualification as a director.
Other advantages for the owners of a limited company is that they do not need to trade in their own name and the only information in the public domain is the limited information that they must set out at Companies House. Therefore, information about personal assets and ownership and other group arrangements do not need to be declared.
It is also generally easier to obtain finance and capital investment if you are a limited company as there is always financial information publicly available.
How to incorporate a company at Companies House
An application must be made to the Registrar of Companies for a company name to be registered publicly. There is no requirement for a minimum number of directors, although at least one director has to be a natural person. The public record requires details of the person or persons to be appointed as director(s) and the names of all the shareholders, with the number and value of individual share ownership.
Once this is registered, the Registrar assigns a company registration number to the company and a certificate of incorporation is issued. From that date the company is incorporated.
- it is also possible, and quite common, to use a ‘shelf company’. This is a company already registered with Companies House. A small fee is required to acquire the company and change the name of directors and shareholders.
- these companies are sold on-line through a number of company registration websites and is a low cost way of starting a company.
- at Francis Wilks & Jones our team of experts can help you with company set up.
What are the obligations of a company at Companies House?
All companies must file and keep up to date certain company records. Every year a company must file:
- a confirmation statement (formerly an Annual Return) ensuring that the correct company details.
- statutory accounts – these must be prepared from your company’s financial records at the end of your company’s financial year and copies sent to
- all shareholders;
- people entitled to attend company general meetings; and
- HMRC as part of your company tax return.
It is important as a business owner to keep on top of these obligations. There are penalties for late filing of the confirmation statement and annual accounts, including a fine or being struck off.
These must include as a minimum:-
- a balance sheet showing the value of everything the company owes and is owed – this must have the name of the director printed on it and must be signed by a director;
- a profit and loss account which shows the company’s sales, running costs and profit and loss;
- notes about the accounts;
- a director’s report;
- you might also have to include an auditor’s report depending on the size of the company.
The statutory accounts must either meet the International Financial Reporting Standards or the new UK Generally Accepted Accounting Practice. We would highly recommend involving an accountant no matter what the size of your company, to ensure you meet all the filing requirements.
If you are starting up a business, or would like help with your obligations, contact one of our friendly team of experts at Francis Wilks & Jones. We have many years of experience helping companies with their legal filing obligations.
There are other documents that must be filed at Companies House during the life of the company. For example, if the company gives security over assets for a loan, then any debenture or legal charge must be registered against the company at Companies House for it to be valid. It is imperative to take expert legal advice at these times in order to ensure you are compliant with Companies House requirements.
Strike off dissolution of a company at Companies House
The Registrar of Companies has the power to strike-off a company if there is reasonable cause to believe that the company isn’t carrying on business or is still in operation. This is most common if the company has failed to make its annual statutory filings within a reasonable period.
Before the company is dissolved the Registrar must give the company two months’ notice and a copy of the notice is placed on the company’s public record.
As a director and/or a shareholder of the company, it is essential if you want the company to continue to run that you make sure that you maintain your annual statutory filings, including filing all company accounts and company tax returns to avoid the risk of being struck-off.
At Francis Wilks & Jones we have extensive experience in advising business owners on their requirements to Companies House and can advise you on the requirements for your company. Contact us today and you will always speak to someone at a senior level who will respond to any query you have quickly. Please call any member of our team for your expert consultation today. Alternatively email us with your enquiry and we will call you back at a time convenient to you.