Company formation - Companies House filing requirements

Learning Outcomes

This article details the essential procedures and documentation for incorporating a private limited company in England and Wales, concentrating on Companies House filing requirements. It covers the application process using Form IN01, the necessary supporting documents like the memorandum and articles of association, the role of the certificate of incorporation, and initial post-incorporation considerations related to registration. Your understanding of these requirements is important for answering SQE1-style multiple-choice questions on company formation.

SQE1 Syllabus

For SQE1, you are required to understand the practical steps involved in forming a company, specifically the interaction with Companies House and the documentation needed for incorporation. An understanding of these procedures is essential for advising clients and managing company law scenarios.

As you work through this article, remember to pay particular attention in your revision to:

• the procedures and documentation required to incorporate a company by registration
• the specific information required for Form IN01
• the function and content requirements of the memorandum and articles of association
• the significance of the certificate of incorporation as evidence of formation
• the concept of Persons with Significant Control (PSCs) and related initial disclosures.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following documents primarily outlines the internal regulations and governance structure of a company?
   1. Memorandum of Association
   2. Form IN01
   3. Certificate of Incorporation
   4. Articles of Association
2. What is the minimum number of directors required for a private limited company in England and Wales?
   1. None, if there is at least one shareholder.
   2. One natural person.
   3. Two directors, one must be a natural person.
   4. Three directors.
3. Which statement regarding the Memorandum of Association for companies incorporated under the Companies Act 2006 is most accurate?
   1. It sets out the company's objects and limits its capacity.
   2. It primarily confirms the subscribers' intention to form a company and take shares.
   3. It must be filed annually with the confirmation statement.
   4. It can be amended by a special resolution after incorporation.

Introduction

Unlike unincorporated business structures, a limited company comes into existence only through a formal legal process known as incorporation, administered by the Registrar of Companies at Companies House. This process grants the company separate legal personality and limited liability for its members. Understanding the specific documents and information that must be filed with Companies House is fundamental for solicitors advising on business start-ups. This article focuses on these core registration requirements under the Companies Act 2006 (CA 2006).

Methods of Obtaining a Company

Clients seeking to operate via a limited company typically have two routes:

1. Incorporating a new company: This involves preparing and submitting all required documentation to Companies House for the specific needs of the business.
2. Acquiring a shelf company: This is a pre-registered company, usually set up by formation agents or law firms, which has not traded. It offers speed but may require subsequent changes (directors, shareholders, name, articles) to suit the client's requirements.

Incorporation by Registration

The most common method of forming a company is by registration. This involves submitting specific documents and information to Companies House.

Required Documentation

The key documents required for registration under the CA 2006 are:

• The application for registration (currently Form IN01).
• The memorandum of association.
• The company's articles of association (unless adopting the standard Model Articles without amendment).
• The applicable registration fee.

Applications can be made electronically or by post. Upon satisfaction that the requirements are met, Companies House issues the Certificate of Incorporation.

Key Term: Incorporation The legal process, regulated by the Companies Act 2006 and administered by Companies House, by which a company is formed as a separate legal entity distinct from its owners and managers.

Key Term: Memorandum of Association A document required for incorporation under the CA 2006, primarily serving as a declaration by the initial subscribers of their intention to form a company and become members (taking at least one share each in a company limited by shares). It has limited ongoing constitutional significance post-incorporation.

Key Term: Articles of Association The primary constitutional document of a company, setting out the internal rules governing its operation, management, decision-making processes, and the rights and duties of directors and members.

The Certificate of Incorporation

Once the Registrar is satisfied, a Certificate of Incorporation is issued.

Key Term: Certificate of Incorporation The official document issued by Companies House confirming a company's legal formation, its registered number, date of incorporation, and basic status (e.g., private/public, limited by shares/guarantee). It is conclusive evidence (s 15(4) CA 2006) that the company has been duly registered.

The company legally exists from the date stated on this certificate. It is only from this point that the company has legal capacity to enter into contracts in its own name. Any contracts purportedly made on the company's behalf before this date generally bind the individuals (promoters) who made them (s 51 CA 2006).

The Application Form (Form IN01)

Form IN01 requires comprehensive details about the proposed company. Key sections include:

Company Details

• Proposed Name: Must end with 'Limited' or 'Ltd' (s 59 CA 2006). It cannot be the same as an existing registered name (s 66 CA 2006) and must not be offensive (s 53 CA 2006) or contain restricted words without approval. Checking name availability via Companies House and the trademark register is essential.
• Registered Office: The company's official address within England and Wales (or Wales, Scotland, Northern Ireland) where legal documents can be served (s 86 CA 2006). This address is public information.

Key Term: Registered Office The official address of a company required for registration purposes, used for formal communications and the location where certain statutory records must be kept or made available for inspection.

• Articles of Association: The application must state whether the company adopts the Model Articles in full, adopts them with amendments, or provides entirely bespoke articles (s 9(5) CA 2006).

Key Term: Model Articles Standard default sets of articles of association provided by regulations (The Companies (Model Articles) Regulations 2008). Private companies limited by shares typically adopt Schedule 1 unless bespoke articles are registered. They apply automatically if no articles are registered (s 20 CA 2006).

Proposed Officers

• Directors: Details required include full name, date of birth (month and year are public), nationality, occupation, service address (public), and residential address (protected from public disclosure unless used as the service address). A private company must have at least one director, who must be a natural person aged 16 or over (ss 154, 155, 157 CA 2006).
• Company Secretary: Appointment is optional for private companies (s 270 CA 2006). If one is appointed, their details (name, service address) are required.

Statement of Capital and Initial Shareholdings

This section details the company's initial share structure for companies limited by shares (s 10 CA 2006).

Key Term: Statement of Capital Part of the incorporation application detailing the number of shares, their aggregate nominal value, the classes of shares and their associated rights, and the amount paid or unpaid on subscription.

It includes:

• Total number of shares subscribed for.
• Aggregate nominal value.
• Details of each class of share (if more than one) and their rights.
• Amount paid and unpaid on each share per subscriber.

People with Significant Control (PSCs)

Details must be provided for any individual or registrable legal entity that meets the criteria for significant control over the company upon formation (Part 21A CA 2006).

Key Term: People with Significant Control (PSC) An individual or registrable legal entity satisfying one or more specified conditions relating to share ownership (holding >25%), voting rights (holding >25%), the right to appoint/remove a majority of the board, or exercising significant influence or control.

The specific condition(s) met must be stated (e.g., holds more than 25% but not more than 50% of the shares). This information forms the initial basis of the company's PSC register.

Worked Example 1.1

Founders propose to form TechStart Ltd with 100 ordinary £1 shares. Founder A will take 60 shares (£60 nominal value) and Founder B will take 40 shares (£40 nominal value), both fully paid. Both will be directors. What information regarding capital and PSCs is needed for Form IN01?

Answer: The Statement of Capital needs to show: Total shares = 100; Aggregate nominal value = £100; Class = Ordinary; Prescribed particulars (rights) = standard voting/dividend rights; Amount paid = £1 per share; Amount unpaid = £0. The Initial Shareholdings section lists Founder A subscribing for 60 shares and Founder B for 40. The PSC section must identify both A and B as PSCs, stating the nature of control (e.g., ownership of more than 50% but less than 75% of shares/voting rights for A; ownership of more than 25% but not more than 50% for B).

Statement of Compliance

This is a declaration confirming that all requirements of the CA 2006 regarding registration have been complied with (s 13 CA 2006).

Key Term: Statement of Compliance A declaration, included in the application for registration (Form IN01), confirming that the requirements of the Companies Act 2006 regarding company formation have been met.

Post-Incorporation Filing and Administration

While detailed ongoing compliance is beyond this article's scope, certain immediate post-incorporation steps relate to initial setup and registration:

• First Board Meeting: Decisions often include formally appointing a chairperson, adopting a company seal (optional), appointing bankers, appointing auditors (if required), setting the accounting reference date (or accepting the default), approving directors' service contracts, and registering for relevant taxes (Corporation Tax, PAYE, VAT).
• Statutory Books: Establishing the company's statutory registers (members, directors, PSCs, charges etc.), unless the company elects to keep information on the public register at Companies House (ss 113, 162, 790M CA 2006).

Revision Tip

While form numbers (IN01, AP01, CS01 etc.) can be helpful, the SQE1 focus is on understanding what information needs to be filed, why, and the consequences of failing to comply, rather than rote memorisation of form codes. Understand the purpose behind the filings.

Exam Warning

Be precise about the documents required at incorporation. The Memorandum of Association is required but has minimal ongoing constitutional role post-CA 2006, unlike the Articles of Association which contain the company's internal rules. Don't confuse their functions. Ensure you distinguish initial registration filings (IN01) from ongoing filings like the Confirmation Statement (CS01).

Key Point Checklist

This article has covered the following key knowledge points:

• Incorporation by registration at Companies House is the standard method for forming a limited company.
• Key documents include Form IN01, the Memorandum of Association, and the Articles of Association (unless using Model Articles).
• Form IN01 requires details on the company name, registered office, directors, initial shareholders, share capital, and Persons with Significant Control (PSCs).
• The Certificate of Incorporation is issued by Companies House and marks the company's legal existence.
• The Articles of Association (often the Model Articles) form the company's internal rulebook.
• Companies have ongoing filing obligations, including submitting annual accounts and a confirmation statement.

Key Terms and Concepts

• Incorporation
• Memorandum of Association
• Articles of Association
• Certificate of Incorporation
• Model Articles
• Registered Office
• Statement of Capital
• People with Significant Control (PSC)
• Statement of Compliance