Link to PDF version of this page
June 2008 version 15 - as modified by the Companies Act 2006
When reading these guidance notes, you need to be aware of the following:
All companies must have officers. From 6 April 2008 this means at least one director for a private company, and at least two directors and a company secretary for a public limited company. A private limited company does not have to have a company secretary but it can choose to include in its articles a requirement to have one.The director, or directors, must manage the company's affairs in accordance with its articles of association and the law. Certain responsibilities apply to all directors, whether executive or non-executive, and to all types of company whether trading or not. The company secretary has a few duties set out in the legislation, and may be given others by the articles or the directors.
If, after reading this guide, you are in doubt about your responsibilities, you should seek professional advice from a solicitor or accountant.
Back to top
Limited companies: the basics
1. Do I really need a limited company?
The majority of businesses are not companies. There are various reasons for having a company, for example, it could involve ownership of property, obtaining investment funds, taxation or contractual relationships. Many businesses function satisfactorily as sole traders or partnerships.
The key point to recognise is that a company is a separate entity.
Limited liability gives the owners of the company (its shareholders) protection if the company fails.
This means that if a company is put into liquidation, the people who own the company will only be required to pay what they have already paid or agreed to pay towards settling its debts- usually what they have paid or agreed to pay for their shares.
3. How do I set up a limited company?
If you decide, maybe after taking professional advice, that a limited company is the best thing for your business, you can buy a ready-made company from a company incorporation agent. Alternatively, you can incorporate a company yourself - for details see our booklets, 'Company Formations' and 'Company Names'.
4. What can I do with an unwanted company?
If you decide that you do not need a company that you have set up, you should consider putting it into voluntary liquidation. Alternatively you may be able to apply for it to be struck off the register.
Our guidance booklets 'Liquidation and Insolvency' or 'Liquidation and Insolvency (Scotland)' and 'Strike-off, Dissolution and Restoration' or 'Strike-off, Dissolution and Restoration (Scotland)', will give you more information on these subjects.
Back to top
Responsibilities of a company director
1. Can anyone be a director?
Generally it is up to the members to appoint the people they believe will run the company well on their behalf. The only restrictions that prevent anyone becoming a director are:
2. What are the Directors’ duties to the company?
Directors’ general duties to their companies are, for the first time, comprehensively set out in the Companies Act 2006 but these provisions are coming into force in separate stages: most of them came into force in October 2007; and those on conflicts of interest will come into force on 1 October 2008. The general duties of directors were previously contained in case law. See the Department of Business, Enterprise & Regulatory Reform website www.berr.gov.uk for further guidance.3. What responsibilities does a director have towards Companies House?
Every company director has a personal responsibility to deliver statutory documents to Companies House as and when required by the Companies Acts. These include, in particular:
In addition, it is usually the directors who will give notice of change of registered office (Form 287)
4. What happens if I do not submit accounts or annual returns to Companies House?
As a director of a company you can be prosecuted for not submitting these documents to Companies House on time. This is a criminal offence and upon conviction a director can be fined up to £5,000 for each offence. There is a separate, civil penalty imposed on the company for the late filing of accounts.
If Companies House believes that the company is no longer carrying on business or in operation, we can, after writing to the company to check whether that is true, strike it off the register and dissolve it. If this happens all the assets of the company, including its bank account and property, generally become the property of the Crown. Once a company is dissolved it can only be restored to the register and continue in existence by means of a court order. For further details see our guidance booklet, 'Strike-off, Dissolution and Restoration' or 'Strike-off, Dissolution and Restoration (Scotland)'.
5. Are directors really prosecuted?
Yes. On average we prosecute more than 1,600 directors each year for failing to deliver accounts and returns to Companies House on time. Persistent failure to deliver statutory documents on time may also lead to a director being disqualified by court order from taking part in the management of a company, for a period specified in the order.
6. What if I deliver the accounts late?
Yes. This could affect any future business opportunities as potential customers can search our website which gives free information about which accounts are outstanding. Not filing or filing late could possibly have a consequence on the company’s credit rating8. How can I avoid prosecution and late filing penalties?
Make sure your company complies on time with all its filing obligations, not only in connection with its accounts and annual returns, but in connection with all other documents required under the Act.
9. Isn't my accountant supposed to do all this?
Your accountant's responsibilities depend on the agreement you have with them. However, the responsibility to deliver accounts and other statutory documents rests entirely with the directors.
10. Why does Companies House need this information?
1. Do I need a company secretary?
From 6 April 2008 a private company does not have to have a company secretary, but it can choose to include in its articles of association a requirement to have one. An existing private company that decides to terminate the appointment of their secretary must notify that termination to Companies House on a form 288b. A public company still needs to have a company secretary.
3. What is the role of a company secretary?
(b) Ensuring that the company files statutory information promptly. See Chapter 4, 'What you have to send to Companies House', for more information.
(d) Providing members with proposed written resolutions and auditors with any passed resolutions. For more information see our guidance booklet 'Resolutions & Meetings'.
As the secretary is an officer of the company, they may be criminally liable for defaults committed by the company. For example failure to file - in the time allowed - any change in the details of the company's directors and secretary, and the company's annual return.
4. Does a company secretary have any powers?
.5. What rights does a company secretary have?
They depend on the terms of his or her contract with the company.
Back to top
Quoted public companies must also prepare a directors’ remuneration report.
2. Annual returns (Form 363)
However if you do not have the facility to file online you can order a paper copy of the annual return form via our Contact Centre on 0870 33 33 636.
Please note: Currently, a small proportion of companies on the register are unable to use our WebFiling Service. These include companies in compulsory liquidation or companies wishing to file in Welsh. As from June 2008 companies will be able to file certain documents in Welsh, using our WebFiling service. For more information please visit our website www.companieshouse.gov.uk>
There is an annual document-processing fee of £30 (or £15 for users of our Software Filing or WebFiling services), which must be paid with the annual return.If you file the annual return late or not at all, the company and its director(s) and secretary can be prosecuted.
Please note that annual returns are quite separate from annual accounts. For more information about how to complete an annual return, refer to our 'Annual Return' booklet.
3. Change of accounting reference date - Form 225
Every company has an accounting reference date, which is the date by reference to which the company's financial year is determined. Its accounts must be prepared for each financial year. You can change the accounting reference date by using a change of accounting reference date form (Form 225). For more information, see our 'Accounts and Accounting Reference Dates' guidance booklet.
4. Change of registered office - Form 287
All companies must have a registered office: it is the 'home' of the company to which all official documents, notices and court papers have to be sent. The address must be a physical location, not just a post office box. This is because people have the right to visit your office to inspect certain registers and documents, and to deliver documents by hand.
You can change your registered office address by sending a completed Form 287 to Companies House. The change becomes legally effective only when we have registered the form. A person may validly serve any document on the company at the previously registered address for 14 days after the registration of the form.
5. Change of directors and secretary and their details - Forms 288a, 288b or 288c
Any change of a company’s directors or secretaries must be notified to Companies House.
You must submit all changes to directors' and secretaries details within 14 days of the change. You can notify Companies House of any of the above changes online via WebFiling or by using a suitable Software Filing package.
6. Allotments of shares - Form 88(2)
You must submit this form to Companies House within one month of the allotment of shares. You can submit the information online via WebFiling, using a suitable Software Filing package or by sending paper documents to us by post.
Our booklet, 'Share Capital and Prospectuses' gives more information about this.
You must send copies of any special resolutions and certain types of unanimous and ordinary resolutions to Companies House within 15 days of them being passed by the company - our booklet, 'Resolutions', (Companies Act 2006) gives more information about this.
8. Mortgages and charges
You must send details of every mortgage or charge created by the company and requiring registration to Companies House within 21 days of its creation. See our guidance booklet, 'Company Charges and Mortgages' or 'Company Charges (Scotland)'.
Back to top
Quality of documents
1. What happens to documents sent to Companies House?
We scan the documents and forms you deliver to Companies House to produce an electronic image. We then store the original documents, and the electronic image is used as the working document.
When a member of the public views the company record, they see the electronic image reproduced on-line. So it is important not only that the original is legible, but that it can also produce a clear copy.
This chapter lays down a few quality guidelines to follow when preparing a document for filing at Companies House.
2. What happens if my documents do not meet the guidelines?
Section 707B of the Companies Act 1985 allows Companies House to reject documents delivered electronically that it cannot capture electronically, giving a notice saying why they are unacceptable. You must deliver an acceptable copy within 14 days of the notice (otherwise we treat the original as not having been delivered).
3. How should documents be set out?
Every paper document delivered to Companies House must state in a prominent position the registered number of the company, and must comply with any requirements specified by the Registrar relating to the legibility of that document.
Briefly, documents should be on A4 size, plain white paper between 80gsm and 100gsm in weight with a matt finish. Text should be black, clear, legible, and of uniform density. Letters and numbers must not be less that 1.8mm high, with a line width of not less than 0.25mm.
Important: coloured ink can drop out (disappear) when a document is scanned to produce an image. To prevent this - always use black ink to complete and sign all documents.
4. What are the most common problems to avoid?
If you are producing colour-printed glossy accounts, please save them for your shareholders and others who will appreciate them. We still need black on white with a matt finish. A typed unbound version or printer's proof is ideal, provided it has the necessary signatures.
Our requirements on document quality apply equally to the lists of shareholders that accompany annual returns and allotment forms.
If these are computer prints, it is essential that the print quality is good. We have particular problems with lists printed on green-lined computer paper. We can handle members lists on paper up to 14.5" x 12".
We will accept documents delivered on certain types of computer-generated microfiche (comfiche) on a black master - as an alternative to paper - provided we can duplicate them on our diazo machines.
We accept large members’ lists on CD-ROM, DVD-ROM and floppy disk. We may also be able to accept magnetic tape for very large listings.
5. Can I find out more about this?
For further guidance on print requirements contact 0870 33 33 636.
Back to top
1. How do I send information to the Registrar?
The safest and most secure way to send statutory information to Companies House is to use our online filing services. For more information and registration details please visit our website www.companieshouse.gov.uk. You may deliver documents to the Registrar by hand (personally or by courier), including outside office hours, bank holidays and weekends to Cardiff, London and Edinburgh.
If you are sending documents by post, courier or Document Exchange Service (DX) and would like a receipt, Companies House will provide an acknowledgement if you enclose a copy of your covering letter with a pre-paid addressed return envelope. We will barcode your copy letter with the date of receipt and return it to you in the envelope provided.
Please note: an acknowledgement of receipt does not mean that a document has been accepted for registration at Companies House.
Companies House sends an automatic e-mail acknowledgement for every submission made via WebFiling and an additional e-mail indicating whether the submission has been accepted or rejected.
Please note: Companies House does not accept accounts or any other statutory documents by fax.
2. Can I file documents in other languages?
Usually, you must file documents sent to Companies House in English. There are exceptions as detailed below. You can draw up and deliver documents relating to Welsh companies in Welsh.
In addition companies may also file voluntary certified translations of any document subject to the First Company Law Directive disclosure requirements. These are:
The voluntary translation must relate to a document delivered to Companies House on or after 1 January 2007. Voluntary translations can only be filed in an official language of the European Union and must be accompanied by Form 1106.
3. Where do I get forms and guidance booklets?
|BackTopPrint PageEmail pageSite Map|