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This article may require cleanup to meet Wikipedia\'s quality standards. Please improve this article if you can. (March 2007) |
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| Companies law |
|---|
| Basic forms: |
| Sole proprietorship |
| Partnership (General · Limited · LLP) |
| Corporation (LLC · S · C) |
| Cooperative |
| United States: |
| Business trust LLLP · Series LLC Delaware corporation Nevada corporation |
| European Economic Area, including European Union: |
| SE · SCE |
| United Kingdom / Commonwealth / Ireland: |
| Limited company (By shares · By guarantee) (Public · Proprietary) Community interest company |
| Civil law countries: |
| AB · AG · ANS · A/S · AS |
| K.K. · N.V. · OY · S.A. · GmbH |
| Doctrines |
| Corporate governance |
| Limited liability · Ultra vires |
| Business judgment rule |
| Internal affairs doctrine |
| De facto corporation and corporation by estoppel |
| Piercing the corporate veil |
| Rochdale Principles |
| Related areas of law |
| Contract · Civil procedure |
The initials PLC after a UK or Irish company name indicate that it is a public limited company, a type of limited company whose shares may be offered for sale to the public.
(The roughly equivalent term in the United States is public company. In U.S. corporation law, there is no equivalent term for a corporation that is publicly traded.)
The designation plc, Plc or PLC (any form is acceptable) was introduced in the UK by the Companies Act 1980, and in the Republic of Ireland by the Companies (Amendment) Act 1983. In the Republic of Ireland, the initials "CPT" (for the Irish cuideachta phoiblí theoranta) may be used instead, but this is rarely the case - as of 2007, two public limited companies are registered with Irish language suffixes, with one bilingually, notably misspelt.[citation needed] Welsh companies may use the letters CCC (for cwmni cyfyngedig cyhoeddus) in similar fashion. Certain public limited companies incorporated under special legislation (mainly nationalised concerns) are exempt from carrying the letters PLC, CCC, or CPT.
When a new company is incorporated in either England and Wales or Scotland, it must be registered with Companies House, which is an Executive Agency of the Department for Business, Enterprise and Regulatory Reform. Northern Ireland has a separate Registrar of Companies. In the Republic of Ireland, the equivalent body is the Companies Registration Office, Ireland.
Internationally, PLC status is roughly equivalent to AG, S.A., N.V. and Corporation.
Contents
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When forming (or creating) a PLC there must be:
While it is not compulsory for a PLC to "float" its shares (some PLCs retain ownership of all their shares, maintaining the PLC designation for the extra financial status), many do so, and their shares are usually traded on either the London Stock Exchange or the Alternative Investments Market (AIM). Irish public limited companies usually trade on the Irish Stock Exchange, though many also list on the LSE, or more rarely, the AIM.
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:
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. One should seek legal advice if intending to appoint a very young person as a director of a 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.
Some people who are not of British nationality are restricted as to what work they may do while in this country.
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:
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 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 public 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:
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.
Most UK Companies are now formed electronically via Company Formation Agents
If you incorporate a company yourself, you will need to send the following documents, together with the registration fee to the Registrar of Companies:
Each of these documents is explained below.
MEMORANDUM OF ASSOCIATION sets out the company name, the registered office address and the company objects. The object of a company may simply be to carry on business as a general commercial company. 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 is the document which sets out the rules for the running of the company\'s internal affairs. The company\'s articles delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.
FORM 10 gives details of the first director(s), 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.
FORM 12 - is a statutory declaration of compliance with all the legal requirements relating to the incorporation of a company. It must be signed by a solicitor who is forming the company, or by one of the people named as a director or company secretary on Form 10. It must be signed in the presence of a commissioner for oaths, a notary public, a justice of the peace or a solicitor. There is usually a £ 5 fee payable to the person that witnesses the statuary declaration.
For detailed information see the Companies House guideCompanies House Guide to Company Formation[1]
PANKAJ The key difference with the paper process is that there is no FORM 12 and requirement for a statuary declaration. This significantly speeds the process and Companies House\'s record for an Electronic Company formation is 5 minutes.
To access the electronic process you either need compatible software that works with Companies House eFiling service[2] and an account with companies house. Or use a Company Formation Agent. The Company Formation agent will have created a series of links into Companies House, to lookup the Company Name, and submit the company. Different agents have differences in there processes caused by their website and software implementation. Companies House have a list of company formation agents that have passed integration testing[3].
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:
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 the booklet, \'Accounts and Accounting Reference Dates\'.
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 companies meet this filing requirement, Companies House send a pre-printed \'shuttle\' form to their registered office a few weeks before the anniversary of incorporation.
All the company has to do is:
There is an annual document-processing fee of £30 (or £15 for users of the Electronic Filing or WebFiling services), which must be sent to Companies House with the annual return.
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:
The private company if it does not already have sufficient issued share capital must issue £ 50,000 in shares a minimum of 25% part paid.
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.
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