Morgan Russell Solicitors

Company Formation and Governance

Company Formation and Governance

A Guide to Director's Responsibilities

A          INTRODUCTION

1.         Company Administration

Company administration can be a time consuming nuisance for busy Directors.  However, it is an important part of managing a business and should not be neglected.  Officers of a company, namely its Directors and Secretary, if the company has one, can be held liable for offences under the Companies Acts plus a wide range of other legislation covering employment, data protection, public safety etc.  Failure promptly to answer correspondence and documentation from official bodies (e.g. the Registrar of Companies) could have serious repercussions.  For example if the Annual Return is not sent, the Registrar of Companies may assume that the company is no longer operating and remove its name from the register; resulting in the company no longer technically existing.  This means that its bank account and any other company assets are frozen and neither Directors nor shareholders can deal with the assets unless a Court Order is obtained restoring the company to the register.

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A Guide to the Role of Company Secretary

A          INTRODUCTION

In conjunction with this Guide please also see the separate Briefing Notes “A Guide to Director’s Responsibilities”, particularly section C thereof.

Private companies are no longer obliged to appoint a Company Secretary.  However, a company which does not have a Company Secretary is not subject to any lower administrative burden.  The requirements on the company will remain the same and the company will need to ensure that someone is assigned the responsibilities previously carried out by the Company Secretary.  Like directors, a Company Secretary is also an “officer” of the company. 

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Which Business Structure

Choice of business – Sole trader, partnership, limited company or LLP?

When starting up your business one of the issues to think about is what sort of legal structure you might need.  There are four widely used forms of business structure used in the UK, as follows: 

  • sole trader
  • a partnership (or “firm”)
  • a limited liability partnership (or “LLP”)
  • a limited company (this briefing note only deals with private limited companies).

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Directors' Residential and Service Addresses

Officers of a company, LLP or overseas companies registered in the United Kingdom are required by law to provide an address for service of documents. Under the old Companies Act 1985, this had to be the officer’s home address. Under the new legislation, officers may apply to keep this information off the public record, but, in addition to a “service address” which goes on the public record, they are still required to provide a residential address to the company for whom they act and the Registrar of Companies at Companies House.

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Voluntary Strike Off and Voluntary Liquidation

Voluntary Strike Off

IN WHAT CIRCUMSTANCES CAN A COMPANY APPLY TO BE STRUCK OFF THE REGISTER?

A company can apply to the registrar to be struck off the register and dissolved.  A company can do this if it is no longer needed.  The directors make the application.

This procedure is not an alternative to formal insolvency proceedings where these are appropriate.

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