The Appointment of Underage Directors
All company directors in the UK must be at least 16 years old. When trying to form a company, Companies House must reject applications with directors who are under 16 years of age.
The Issuance of Shares to All Directors
There are many companies where directors are also shareholders. Separate the duties of managing a company as a director from those of owning it as a shareholder. Shares should only be issued to people who intend to have a stake in the company.
As a shareholder, you have rights within the company. These include:
Participation in meetings and the right to vote
Having the right to receive a distribution of profits by way of dividends (a share of profits)
The right to profit from a company’s sale
Rights outlined in the Companies Act 2006
Instead of a Not-For-Profit Organization, Forming a Limited Liability Company
It is unfortunately more common than you would think. A Limitation of a company by guarantee is typically a ‘not-for-profit’ organization and is not set up to generate wealth for its owners. The owners of a company limited by shares usually intend to make a profit through their company.
The two types of companies cannot be switched. The company you register incorrectly needs to be dissolved/struck off, and a new company registered that is the appropriate legal entity.
Too Many Shares Issued
We usually issue nominal shares of very small amounts when we form companies for our clients. A company-owned solely by one individual may be registered with only one share worth £1. We occasionally receive calls from our customers whose company has issued 1 million £1 shares to a shareholder. Such action is generally not advised. When you issue a large volume of shares, you will be responsible for the shares. This will require you to consider how they are paid for or accounted for.
When a company is created and too many shares are issued in error, the problem can’t just be solved. It’s not as simple as calling Companies House and reporting it as a mistake. In spite of the possibility of a buyback (unlikely if the new company does not have money) or continuing to issue shares, a simple solution is to dissolve/strike off the previous company and register a new one. Please let us know if you need assistance transferring shares to a British company.
Typographical Errors in Your Company Name and Details
We fix spelling and grammatical errors most often. The error can be rectified by using Companies House’s online filing service if the name or address is incorrect. If a typo occurs in the company name, it’s easier to fix, but there is an additional charge from Companies House. We offer a company name change service if this occurs.