Among the exhaustive list of documents required for forming a Limited Liability Company, four documents are considered as indispensable to the entire process. This includes the Form 10, Form 12, the Memorandum of Association and the Articles of Association.
The establishment of a company with limited liability requires the incorporation of many exhaustively descriptive legal documents which need to be registered with the Companies House and preparing such documents is beyond the comprehension of most people. Usually, these four documents are submitted together and if rejected, it becomes necessary to re-declare Form 12 with any of the witness choices mentioned below (glossary).
Form 10 & Form 12
It should be understood that Form 10 & Form 12 are not the easiest to understand and correctly filing all the prescribed information through them is a challenging task. If they contain the slightest of errors, the Companies House can simply reject the submitted document.
The Companies House can be understood as the principal government agency that is responsible for the registration of newly-formed companies in the UK. Similarly, the Memorandum of Association and the Articles of Association present their own set of problems, being multifaceted documents that are full of intricately-listed issues.
Memorandum and Article of Association
Those who want to have a basic idea about the Memorandum of Association and the Articles of Association can view their format that is listed in The Companies Regulations 1985 (Tables A to F). It is a legislative document that contains recommended ways of preparing the Memorandum of Association and the Articles of Association. Those who are searching for a hard copy of such regulations can obtain the same from The Stationery Office Limited that is located at Nine Elms, London.
However, even if one equips himself/herself with all the information that is included as a part of The Companies Regulations 1985 (Tables A to F), the entire process still has many complications.
For a start, the examples listed in the Articles of Association (‘Table A’) are not compatible with the functioning of modern-day companies. These include some impractical company meeting procedures like those related to recording the Minutes of company meetings and some provisions such as the compulsory rotation of company directors.
The Companies Regulations 1985 provides nearly negligible amount of guidance regarding the signing procedure that is typical for furnishing the Articles of Association.
Glossary
- Articles of Association — this document deals with issues such as conduct of the directors/members during company meetings, the transfer of shares, Directors’ indemnity and the declaration of dividends. It is integral to the company formation since it describes the way in which the company seeks to deal with various aspects related to its functioning.
- Form 10 — its main purpose is to furnish all the basic information concerned with the formation of a new company. The mandatory fields in a Form 10 include information related to the company's name (proposed) and the registered office. It should be signed by the proposed director(s), company secretary(s) and the initial members/shareholders of the company (the subscribers).
- Form 12 — the main purpose of this document is to declare that all the documents being submitted along with it have been filled honestly and that they comply with the concerned legislations. In current practice, Form 12 is being submitted electronically too. Form 12 is like a statutory declaration which should have a witness in the form of a signature by the Notary Public, the Justice of the Peace, the Commissioner for Affidavits or a solicitor.
- The Memorandum of Association — this document states the name of the company, its registration number, address of the proposed registered office and the type of company along with details about its share capital, extent of liability of its members & subscribers and the objectives of the company. The Memorandum should also exhibit information about the shares held by each subscriber.
- Minutes — this is an official record of meetings that are scheduled by the company and states the decisions that were taken in the meeting. The meeting could be an Annual General Meeting that involves the shareholders or the one that is called by the Company Board. Minutes of meetings have to be recorded and then filed in the Company Register.
The process of forming an active company is highly demanding, in terms of being time-consuming and the plethora of legal and administrative procedures that are involved in it. It is practically impossible to carryout the entire set of concerned procedures without employing the services of professional advisors or solicitors.
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