WHO CAN FORM A LIMITED COMPANY
The Companies Act generally allows three or more persons to form a company for any lawful purpose by subscribing to its memorandum of association.

CHOOSING THE NAME
You will find the relevant law in the Companies Act 1985 and in the Company and Business Names Regulations or in the UK Company Registration Procedure.

COMPANY DIRECTOR
Formation of a public company requires a minimum of two directors. In general terms anyone can be a company director, but there are some rules. You can't be a company director if:

• you are an undercharged bankrupt or disqualified by a court from holding a directorship, unless given leave to act in respect of a particular company or companies;

• in the case of PLCs or their subsidiaries, you are over 70 years of age or reach 70 years of age while in office, unless you are appointed or re-appointed by resolution of the company in general meeting of which special notice has been given.

There is no minimum age limit in the Companies Act for a director to be appointed in England and Wales. However, he or she must be able to consent to their own appointment. You should seek legal advice if you intend to have a very young person as a director of your company.

In Scotland the Registrar will not register for any company the appointment of a director under the age of 16 years old. A child below that age does not have the legal capacity to accept a directorship - Age of Legal Capacity (Scotland) Act 1991. If you need more information, contact Companies House, Edinburgh.

Some people who are not of British nationality are restricted as to what work they may do while in this country. If you need more information about whether such a person can become a director of a UK-registered company, contact:

Home Office Immigration and Nationality Department
Lunar House
Wellesley Road
Croydon
CR9 2BY   (Tel: 0870 606 7766)

COMPANY SECRETARY
The secretary (or each joint secretary) of a public limited company must also be a person who appears to the directors to have the necessary knowledge and ability to fulfil the functions and who:

1. held the office of secretary or assistant or deputy secretary on 22 December 1980; or

2. for at least three of the five years before their appointment, held the office of secretary of a non-private company; or

3. is a barrister, advocate or solicitor called or admitted in any part of the United Kingdom; or

4. is a person who, by virtue of his or her previous experience or membership of another body, appears to the directors to be capable of discharging the functions of secretary; or

5. is a member of any of the following bodies:

• the Institute of Chartered Accountants in England and Wales;

• the Institute of Chartered Accountants of Scotland;

• the Institute of Chartered Accountants in Ireland;

• the Institute of Chartered Secretaries and Administrators;

• the Chartered Association of Certified Accountants;

• the Chartered Institute of Management Accountants (formally known as the Institute of   Cost and Management Accountants); or

• the Chartered Institute of Public Finance and Accountancy.

SHARE CAPITAL
When a company is formed, the person or people forming it decide whether its members' liability will be limited by shares. The memorandum of association (one of the documents by which the company is formed) will state:

	the amount of share capital the company will have; and
	the division of the share capital into shares of a fixed amount.

The members must agree to take some, or all, of the shares when the company is registered. The memorandum of association must show the names of the people who have agreed to take shares and the number of shares each will take. These people are called the subscribers.

There is a  minimum share capital for private limited companies: Before it can start business, it must have allotted shares to the value of at least £50,000. A quarter of them, £12,500, must be paid up. Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium.

A company can increase its authorised share capital by passing an ordinary resolution (unless its articles of association require a special or extraordinary resolution). A copy of the resolution - and notice of the increase on Form 123 - must reach Companies House within 15 days of being passed. No fee is payable to Companies House.

A company can decrease its authorised share capital by passing an ordinary resolution to cancel shares which have not been taken or agreed to be taken by any person. Notice of the cancellation, on Form 122, must reach Companies House within one month. No fee is payable to Companies House.

A company may have as many different types of shares as it wishes, all with different conditions attached to them. Generally share types are divided into the following categories:

	Ordinary As the name suggests these are the ordinary shares of the company with no special rights or restrictions. They may be divided into classes of different value.
	Preference These shares normally carry a right that any annual dividends available for distribution will be paid preferentially on these shares before other classes.
	Cumulative preference These shares carry a right that, if the dividend cannot be paid in one year, it will be carried forward to successive years.
	Redeemable These shares are issued with an agreement that the company will buy them back at the option of the company or the shareholder after a certain period, or on a fixed date. A company cannot have redeemable shares only.

A PLC has access to capital markets and can offer its shares for sale to the public through a recognised stock exchange. It can also issue advertisements offering any of its securities for sale to the public. In contrast, a private company may not offer to the public any shares in itself.

MEMORANDUM OF ASSOCIATION
This document sets out:

• the company's name,

• where the registered office of the company is situated (in England, Wales or Scotland); and

• what it will do (its objects). The object of a company may simply be to carry on business as a general commercial company.

Other clauses to be included in the memorandum depend on the type of company being incorporated. The form of memorandum for each type of company is set out in a set of tables called The Companies (Tables A to F) Regulations, 1985.

The company's memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.

ARTICLES OF ASSOCIATION
This document sets out the rules for the running of the company's internal affairs. Model articles are provided in the Tables mentioned above.

A company may adopt the whole of Table A as its articles or any part of it.

A company limited by shares which has adopted the whole of Table A without modification does not need to deliver a copy for registration. However, you must attach a letter to your application saying this. CICs cannot take advantage of Table A to avoid registering articles.

FORM 10
Form 10 gives details of the first directors, secretary and the intended address of the registered office. As well as their names and addresses, the company's directors must give their date of birth, occupation and details of other directorships they have held within the last five years. Each officer appointed and each subscriber (or their agent) must sign and date the form.

Company can have postal and registered addresses at once. The importance of the registered address is that all official letters and documentation from the government departments (including Inland Revenue and Companies House) will be send hire and this address have to be shown on all your official company' documentation. The registered office can be anywhere in England and Wales (or Scotland if your company is registered there). The registered office must always be an effective address for delivering documents to the company, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly. If a company changes its registered office address after incorporation, the new address must be notified to Companies House on Form 287.

COMPANY ACCOUNTS
A company's first accounts must start on the day of incorporation. The first financial year must end on the 'accounting reference date' or a date up to seven days either side of this date. Subsequent accounts start on the day following the year-end date of the previous accounts. They end on the next 'accounting reference date' or a date up to seven days either side.

To help you meet this filing requirement, the Companies House send a pre-printed 'shuttle' form to your registered office a few weeks before the anniversary of incorporation. This will show the information that you have already given to the Companies House. If your accounts are delivered late, there is an automatic penalty. This is between £500 and £5,000 for a PLC .

The first accounts of a public company (PLC) must be delivered:

	within seven months of the end of the accounting reference period; or
	if the accounting reference period is more than 12 months, within 19 months of the date of incorporation, or three months from the end of the accounting reference period, whichever is longer.

You may change the accounting reference day by sending Form 225 to the Registrar. You must do this during the accounting period affected by the change or during the period allowed for delivering the associated accounts to the Companies House. For more information, see 'Accounts & Accounting Reference Dates'.

ANNUAL RETURNS
Every company must deliver an annual return to Companies House at least once every 12 months. It has 28 days from the date to which the return is made up to do this.

To help you meet this filing requirement, we send a pre-printed 'shuttle' form to your registered office a few weeks before the anniversary of incorporation. This will show the information that you have already given us.

All you have to do is:

	check that the details are still correct;
	amend any that are not; and
	send the form back, signed and dated, within 28 days of the date of the return which is shown on the front of the form.

There is an annual document-processing fee of £30 (or £15 for users of our Electronic Filing or WebFiling services), which must be sent to us with the annual return.

RE-REGISTRATION AND CONVERSION OF A COMPANY TO A CIC

1. Both a private company limited by shares and an unlimited company with a share capital may re-register as a PLC, but a company without a share capital cannot do so.
   
   A private company must pass a special resolution that it be so re-registered and deliver a copy of the resolution together with an application form to the Registrar. The resolution must also:

	alter the company's memorandum so that it states that the company is to be a public limited company;
	make any other alterations to the memorandum so that it conforms to that required for a public limited company;
	make any required alterations to the articles of association of the company.

2. A public company limited by shares or by guarantee may re-register as a private company limited by shares or by guarantee by passing a special resolution to do so. However, if enough members object, under section 54 of the Companies Act 1985 they may apply to the court to cancel the resolution within 28 days of its being passed.
   
   A Court may also order a public company to re-register as private on approving a 'minute of reduction' of share capital which results in the issued share capital falling below the statutory minimum. In such a case the Court will also specify alterations to the company's memorandum and articles. A special resolution to re-register is not required.