Formation agents

Discussion in 'Accounts & Finance' started by Jaydee, Nov 24, 2008.

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  1. Jaydee

    Jaydee UKBF Enthusiast Free Member

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    Does anybody use a formation agent that can deal easily with different classes of shares from incorporation? The one we use can only do Ordinary shares via the interface and requires an e-mail to confirm details of other classes, and so charge a premium.
    Posted: Nov 24, 2008 By: Jaydee Member since: May 27, 2007
  2. Alpha

    Alpha UKBF Newcomer Full Member

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    I think this is standard due to the interface with companies house I'm afraid.

    It only copes with standard formations and anything else has to be done manually (At a charge if the formation agent carries this out), as I found when I needed to set up a company with joint shareholders:(

    I'm sure Mike can explain the technical reasons better than me though.
    Posted: Nov 24, 2008 By: Alpha Member since: Feb 16, 2004
  3. yorkshirejames

    yorkshirejames UKBF Ace Free Member

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    Unless you really really need it from the very start, then form the company with only 1 share issued, then immediately apply for your web-filing code, and do the other issues yourself.
    Posted: Nov 25, 2008 By: yorkshirejames Member since: Mar 2, 2006
  4. Ozzy

    Ozzy UKBF Founder Full Member - Verified Business

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    The Companies House software gateway is designed to only accept a single type of share on incorporation. Originally this was the case because Companies House took the view when having their software designed that multiple share classes were going to be ruled out. This was shared by others with the opinion they were being used for "TAX planning" :).

    Anyway, several years later multiple share classes are still in use, but Companies House have not changed their systems to accomodate for it. They have made it possible to complete skip passing in the data of the "class" of shares though. This means that now, with some clever wording of the M&A's and a few tweaks on our software, and so long as all the share classes are of the same value per share, it is possible to incorporate a company electronically with multiple share classes.

    This does however require some additional work on our part setting the M&A's up correctly, so we do charge a small premium for it, but it is still cheaper than when we used to do the whole exercise manually.
    Posted: Nov 26, 2008 By: Ozzy Member since: Feb 9, 2003
  5. MikeH

    MikeH UKBF Enthusiast Free Member

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    That pretty much covers it.

    Whilst it would be nice if it were easy to set companies up with multiple share clases, there are dangers involved too. If it were possible for customers to register multiple share clases online I doubt that some would put enough consideration into the rights attached to each share class. It would be like opening a whole set of new problems.

    What should they call the sahes

    What rights should they have-
    dividend rights
    ownership rights
    voting rights

    I can only imagine the mess some people could create with too many options.
    Posted: Nov 26, 2008 By: MikeH Member since: Aug 12, 2004
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