Re-registering a private limited company to a public limited company

[Anon47291K]

Hello,

I am going to register a private limited company and get the investment for 20% of my shares. When the assets grow I am going to re-register my company to a public limited company.

How can I do that? What actions do I need to take?

One of the ways I think is to register a fresh public limited company and buy all the shares from the first company. But what to do with the investors who already have 20% of the first company?

Thank you,
Vladimir.

 

[g]

I am going to re-register my company to a public limited company.
How can I do that? What actions do I need to take?

https://www.gov.uk/make-changes-to-your-limited-company/company-type

 

[Anon47291K]

This is from the article:

You’ll also need copies of:

• a special or written resolution
• your company’s new articles of association
• a balance sheet no more than 7 months old
• an auditor’s statement
• an auditor’s report

What is resolution? How to get it?
What are the company's new articles of association?
How to get an auditor's statement?
How to get an auditor's report?

 

[Scalloway]

What is resolution? How to get it?

You need to have a board meeting and get the resolution recorded in the company minutes.

What are the company's new articles of association?

You will already have articles of association agreed when the company is incorporated. These will need to be updated to cover the new status as a PLC

How to get an auditor's statement?
How to get an auditor's report?

You will need to hire an accountant who is a registered auditor to go through the company accounts and procedures in great detail. This will cost thousands of pounds.

 

[KAC]

The PLC must also have an issued share capital of £50,000 of which at least 25% is paid

 

[g]

The post from 'Scalloway' covers it well.

Although not relevant, is there a good reason why you want plc rather than ltd?

• Thirty-or-so years ago they were in-vogue as a means to 'boost your kudos' for smallish firms wanting to appear larger/more important.
• Subsequently, in a return-to-sanity, they became less popular... often because, in terms of compliance relative to benefits, they were too-often an unnecessarily huge pain-in-the-ass.

 

[Anon47291K]

Thank you for the answers.

I got a new question.

"PLCs must also be incorporated with Companies House and form a constitution (ie by adopting Articles of Association and Memorandum of Association). Additionally, they must have a minimum allotted share capital of £50,000 (with at least least 25% being fully paid up) and this needs to be reflected in a Certificate for Commencement of Trading, obtained from Companies House".

I don't understand this bit: "(with at least least 25% being fully paid up)".
How can shares be paid?
Paid to whom?
Paid by who?
Paid before or after placing them on the stock market?

Thanks.

 

[Mr D]

Presumably paid by share owners?
Paid to the company.

 

[Anon47291K]

If the share capital of 50000£ exists, it means the share owners have paid it to the company already.
Am I wrong?
Is it possible that the share capital is bigger than the actual money in the company?
When does that happen?

 

[Scalloway]

Is it possible that the share capital is bigger than the actual money in the company?
When do that happen?

There may be a share premium or a loan.

 

[Anon47291K]

If PLC has 50000£ capital, 75% of which is a loan, can I sell the whole company on the stock market?

 

[Anon47291K]

And if the loan is 80%, I can't sell it, right?

 

[Scalloway]

Can you convert some of the loan to shares?

Getting the shares listed on a stock exchange depends on more than just being a PLC. The requirements of the London Stock Exchange include:

"Other advisers are also integral in supporting a company through the admission process. Such advisers usually include a broker, law firm, accountants, public relations and investor relations firms. Following appointment of advisers, the company will need to prepare an admission document that includes details about its directors, financial position, business activities and strategy. This is prepared in close consultation with the Nomad."

More information here

http://www.londonstockexchange.com/companies-and-advisors/aim/for-companies/joining/aim.htm

 

[LiveNetworks Ltd]

The obvious question is why do you want a PLC? If you're thinking of selling shares, then you really have a lot of work to do before you get to that point.

As for selling on the stock market, forget that idea, listings, even on AIM are massive undertakings, it's not the sort of process you go through by getting free advise on a forum.

 

[Anon47291K]

Thank you for all the answers. I am just studying the UK law before I start any kind of business to understand as much as possible and make less mistakes.
When I want to learn anything, I go on google and read different articles. If I don't understand I ask my questions here.
Could you recommend me any good websites or books to read to learn more about the business laws in the UK? In this case I will ask less questions here.

 

[Mr D]

There's Tolley's about tax.
https://store.lexisnexis.co.uk/prod...-201819-skuuksku9780754554981TG679119/details

There's a few business law books, depends which aspects you are interested in. Bit of a big subject such that some specialise.
https://www.amazon.co.uk/Business-Law-Reference-Education-Books/b?ie=UTF8&node=659966

 

[Anon47291K]

Thanks

 

[g]

I don't understand this bit: "(with at least least 25% being fully paid up)".
How can shares be paid?
Paid to whom?
Paid by who?

Brief clarification...

Shares can be paid, unpaid, part-paid.

The initial members listed on company registration often leave them unpaid - and they can remain so unless the company requests payment or is wound up. It depends on the provisions of the articles of association.

Payment can be made, by the shareholder to the company, in cash or otherwise (including goods/services) - and can be for the full or partial amount of the share value (at issue).

 

[Chris Ashdown]

There are two main stock markets, most new small companies use the AIM market and if successful move upward to the main one after a number of years

This link will give you more information about the AIM Market
https://www.londonstockexchange.com...aim/publications/documents/a-guide-to-aim.pdf

You have not answered why you need a plc, as in real terms you must already be a successful company with a few years trading history and good profits to make it worth while to absorb the high costs involved including a full audit by outside accountants every year

 

[The Byre]

The fact that you have to ask such fundamental questions (and you would need the guidance of a suitable accountancy practice anyway and they do all this guff for you!) tells me that perhaps you should be looking at a less 'ambitious' start to your UK business career. A straight-forward Ltd. would be advisable!