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  • How to Guide: Issue and Transfer of Shares Sep 15, 2020

    Shares are “portions” of a company that is limited by shares and are simply a divided-up unit of the value of a company (each share is a specific percentage of the entire business). If you’re a business owner who has just completed your limited company formation, you’ll soon be making important decisions regarding the allocation of your company shares, including the issue and transfer of shares.

    Limited companies can not only issue more shares post incorporation, but its shareholders (members) may transfer or sell their shares to other individuals at any time. Both must adhere to the procedures set out in the in the Companies Act 2006, the articles of association (find out how to get a copy of memorandum and articles of association), and the shareholder’s agreement (if applicable).

    Transfer of Shares Explained

    In a limited company, the transfer of shares can be exercised from one individual to another in exchange for the following:

    · a monetary payment

    · a non-monetary consideration such as goods/products, services, knowledge, or writing off debts

    · as part of an employee share scheme

    · as a gift to a family member

    The transfer of shares after company formation can be processed by completing a Stock Transfer Form where you’ll be required to provide the following details:

    · Your company’s name

    · Company Registration Number (CRN)

    · Quantity and class(es) of shares being transferred

    · Existing shareholder (transferor) name and address

    · New shareholder (transferee) name and address

    · The amount paid for the shares

    · If applicable, the details of non-cash payments

    · Transferor’s signature

    · If applicable, stamp duty liability

    HMRC must receive a copy of the Stock Transfer Form if the sale value of the transfer exceeds £1,000. The transferee will have to pay Stamp Duty tax of 0.5% of the total sale value.

    The journey of the transfer of shares is not done just yet. After HMRC receives the form, the transfer of shares has to be...

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    Issuing Shares After Company Incorporation

    There could be many reasons why companies will be required to issue new shares, including:

    · bringing in new business partners

    · raising capital from external investors for funding purposes

    · to pay business debts

    · to introduce a bonus scheme for employees

    · to gift shares to family members

    There are no legal restrictions on the number of shares a private company can issue during or post incorporation, in accordance with the Companies Act 2006. However, if needed, some restrictions may be included in the articles of association and shareholders’ agreement. An authorised capital is one of the most common restrictions; it’s essentially a limit on the number of shares that can be issued.

    Owners of a shareholding company can form and issue whatever type of...

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  • How to Change Shareholders at Companies House Sep 8, 2020

    After forming a company, you’ll inevitably have to make some important decisions. And, if the need arises, one of the biggest questions you’ll have to answer is how to change shareholders atCompanies House.

    Before you take the necessary steps to change your shareholders, let’s briefly understand

    the duties and responsibilities of a shareholder and just what those company shares mean for your business.

    The Definition of Shares

    Shares are a “portion” of a company that is limited by shares. It is simply a divided-up unit of the value of a company (each share is a specific percentage of the entire business). The individuals who own shares of a shareholding company are called “shareholders” or “members” (more on “shareholders” later).

    The number of shares held by members reflects how much of a company is owned by them. Typically, shareholders receive a percentage of trading profits in relation to their ownership percentage.

    How to Add New Shareholders

    Understanding the process of adding and removing of shareholders will help answer the question of how to change shareholders at Companies House.

    New company shareholders can be appointed at any time after you incorporate your company. In order to successfully appoint a new company shareholder, current members must transfer or sell all existing shares to the forthcoming shareholder. Alternatively, more “share space” can be issued as you can increase your company’s share capital by allotting (issuing) new shares. However, it’s worth remembering that the issuing of new shares will dilute existing shareholders’ percentages of ownership and control. To allot new shares, current members must waive pre-emption rights on the allotment of shares.

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    How to Remove Company Shareholders

    Remember, the question of how to change shareholders at Companies House does not just relate to the inclusion of additional shareholders, but also refers to the removal of existing shareholders.

    Therefore, should a member wish to leave a company, their stock must be transferred or sold to another individual. The company directors must be responsible for overseeing the transfer and updating relevant member information at Companies House, as well as...

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    Update Company Shareholders’ Details at Companies House

    The public record will disclose all subscribers’ details, including name and contact addresses. Any individual who joins after company formation should only provide their name and share details (unless they are a concurrently a person of significant control).

    So, here’s the simple answer to how to change shareholders at Companies House? If company shareholders’ names or shareholdings change at any point, or new members join or existing members exit the firm, Companies House has to...

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    What to Do When a Company Shareholder Passes Away
    The Value of Shares
    The Definition of a Shareholder
    Who Can Become a Shareholder?

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  • This Is How Your Company Tax Number and Company Number Are Different Aug 25, 2020

    Once you’ve completed your company formation, it’s vital that you use an effective filing system to stay organised as you’ll be dealing with a plethora of documents and important identification numbers — nominally your company tax number and company number. Since there’s little to differentiate these numbers textually, it’s important to recognise and understand that both your company tax number and company number are separate numbers.

    To give you a better understanding of these all-important numbers, let’s look at both your company and company tax numbers’ definitions and uses:

    What Is a Company Tax Number?

    Often referred to as a “tax reference number”, UTR is an acronym for “Unique Taxpayer Reference”. Your company tax number (UTR number) comprises 10 digits (e.g. 0123456789) and is issued by HMRC to all UK residents who complete a tax self-assessment, such as a self-employed individual, sole trader, or limited company owner.

    For those who work in the construction industry, an application for both a company tax number and a Construction Industry Scheme registration (CIS registration) must be made.

    A company UTR number (company tax number) is used to identify companies for issues related to tax. The company tax number will be required for a number of reasons, such as tax submissions to HMRC and the following:

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    How Do You Find Your Existing Company Tax Number?

    In case you’ve forgotten your company tax number, there are a number of ways to retrieve these all-important digits.

    Most of your HMRC correspondence will show your company tax number; make sure you check your tax returns letters or documents such as a P60 or P45. Your company tax number will also be printed on your payslip.

    See this list for where your company tax number may be located:

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    What Is a Company Number?

    Simply put, a company registration number is an identifiable registration number for your company. It will be issued to you by Companies House when you incorporate your limited company or limited liability partnership (LLP). A company registration number is often abbreviated as “CRN” and is computer generated, therefore it cannot be personally selected or amended at a later date.

    Unlike a company tax number, your company number will either have eight numbers (e.g. 12345678) or two letters followed by six numbers (e.g. AB123456). However, unlike a company tax number, a company registration number can take a number of visual forms depending on...

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    How Do You Find Your Existing Company Number?

    Your company’s Certificate of Incorporation, along with any statutory mail sent by Companies House, will display your company registration number. The company registration number is usually printed alongside or beneath a...

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  • Essential Reading: How to Sell Products Online Aug 14, 2020

    Conceiving an idea. Executing your business plan. Generating sales. These are the three fundamental steps to a company’s success. And if you run, or are set to run, a UK-based e-commerce business, then you need to educate yourself on how to sell online in the UK before, or after, completing your company formation.

    Whatever type of products you sell, you have to master the art of how to sell online in sync with ever-growing consumer trends and buying habits.

    Companies of all shapes and sizes continue to leverage a range of new opportunities to sell their products and services online. That’s why researchers at Statista predict a 246.15% increase in global e-commerce sales by 2021. That equates to a worldwide spend of approximately $4.5 trillion, with an estimated $99 billion worth of trading in the UK each year. In the UK alone, 19.2% of all retail sales are made online.

    Essentially, the answer to the question of how to sell online in the UK is that you must be proficient in some key areas. Firstly, you don’t need a huge upfront investment, and with a global customer base (if you can deliver internationally), you simply need to take note of the following points in order to successfully reach a paying customer and sell online.

    Conduct Thorough Market Research

    Before making your products available online, be sure to utilise every marketing avenue available and carry out meticulous research in to your product’s market; you can conduct surveys, analyse current market trends, and study competitors.

    Remember, if your product is already available online and sells successfully, consider this to be a positive! It shows that there is a demand for your business. You can then alter your strategy to attract existing customers. However, if the market is oversaturated, you may find it difficult to penetrate the sales pie — you’ll either need to be wholly original with your revised product design or consider re-evaluating the entire product.

    Create an Effective Business Plan

    An effective business plan will create an important blueprint on which you can carefully execute your selling strategy. Think of it as a guide or manual when assembling a piece of furniture. You can reference the “manual” whenever you become unstuck in order to check you’re on the right path.

    Additionally, your business plan can be...

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    Choose the Correct Selling Platform

    How to sell online in the UK successfully will be heavily reliant on your choice of online platform. Your business plan should determine which online sales platform is the best option for you.

    - Sell on social media
    - Sell on your personal online domain
    - Sell via online marketplaces

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    Select the Most Effective Shipping Methods

    Don’t forget, although customers come to your online platform, you still have to send your products to your customers. Unless you use drop-shipping, you’ll usually be wholly responsible for all shipping matters.

    Note: Drop-shipping is where you do not operate your own...

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    Offer Several Payment Methods

    There are many options for receiving payments from your customers. It’s wise to offer several options, such as...

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  • The Essential Guide for Setting Up a Business Email Address Aug 13, 2020

    After registering your company in its entirety, it’s vital that you complete the registration of a business email address. Adopting a business email address in the UK (and for global businesses) is absolutely fundamental for a number of reasons outlined below.

    How to Set Up a Business Email Address in the UK

    Setting up a business email address in the UK is a simple process and not dissimilar to setting up any other type of email account.

    You can set up a free email account with providers such as Outlook, Gmail, or Yahoo, but business email addresses are best created through domain name providers or web hosting companies. This will give you a “branded” email address with a customer domain extension. For example: [email protected] reads better than the ubiquitous, non-professional address such as [email protected]

    In order to register an online domain name, simply enter a keyword search: “domain registration name UK”. The search engine will return results from popular ICANN accredited registrars like GoDaddy,, and 123-reg, etc.

    What Is the Best Domain Name to Use?

    The most appropriate and effective domain name will be the one that matches your business. You may also use the domain name for your web address.

    Why Is a Business Email Address Important?

    1. Give a Great First Impression
    2. Increase Brand Awareness
    3. Streamline Your Communication

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  • The Roles of a Company Director and Secretary Jul 28, 2020

    A director and secretary hold integral roles within a company, and when appointed, both have a burden of responsibility to maintain the smooth-running of a business. Once you’ve completed your company formation, you must know all of your company’s members, including their assigned roles and responsibilities — in particular, a director and secretary.

    The Definition of a Company Director

    A limited company chooses a company director to manage its daily business activities and finances, ensuring every legal filing requirement is met. A director and a secretary (more on a secretary below) are required to operate with integrity, and abide by the law to make verdicts that better the company as well its members (shareholders). A director can bind the company into valid contracts with third-parties (buyers, lenders, suppliers etc) and act as trustees for a company (but not the individual stockholders).

    This is how the Business Directory defines a director:

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    The Roles of a Company Director

    Company directors act as a collective “board of directors”, albeit the board may delegate certain powers to a board committee or an individual company director.

    The roles and responsibilities of a company director are set out in the Companies Act 2006, the articles of association, and any service contract that may be in effect between a director and the business.

    According to the Companies Act 2006, company directors must:

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    The Definition of a Company Secretary

    A company secretary is an officer (individual) who is appointed by a company’s directors to take on the responsibility for ensuring that the company’s legal obligations comply with the corporate legislation. The Business Directory states:

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    The Roles of a Company Secretary

    According to the July 2018 UK Corporate Governance Code:

    "All directors should have access to the advice of the company secretary, who is responsible for advising the board on all governance matters. Both the appointment and removal of the company secretary should be a matter for the whole board."

    While the roles of a company secretary are not explicitly specified in the Companies Act, they usually have to exercise the following duties:

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  • 8 Advantages of a Business Call Answering Service Jul 23, 2020

    The office phone rings for the first time. You take a breath and reach over to the handset. The way you communicate with this caller could impact the reputation of your business ahead. And if you don’t have the experience and prolific nuances of answering a business call, then you may be damaging your brand significantly. Therefore, when you’re done forming a company, and you’re operating from either an actual or virtual office, it’s not difficult to understand why adopting a business call answering service is so advantageous to your business goals.

    Here are 8 positive points to ponder if you’re still considering the efficacy of an answering service for your business:

    1. Your Company Will Exude Professionalism and Credibility

    If you’re trying to run a professional service, the last thing you want is someone answering your incoming calls in a rude, misinformed, and/or colloquial manner. Therefore, to get complete control of how your incoming calls are answered, the adoption of a call answering service with a virtual receptionist is highly recommended.

    You have the freedom to record your outgoing messages to ensure they reflect the standards of professionalism you require. Even if you hire an in-house receptionist (note: considerable expenses will be incurred), you will not...

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    2. Experience Cost Savings With a Business Call Answering Service

    One of the most important advantages of a virtual answering service is that it can cost you far less in comparison to a live answering service, saving you money when compared with hiring a receptionist.

    The cost of searching, hiring, and subsequently training a new employee might cost you approximately £20-£30k for their salary — not to forget payroll taxes, benefits, bonuses, holidays, sick days or workers’ compensation coverage. Additionally, a receptionist will not be expected to remain at their desk 24-hours-a-day. Hence, you may need...

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    3. Effectively Work With Remote Teams

    Remote working has become an increasingly popular work-life decision employed by many companies the world over. One of the key advantages of remote working are the low employee costs involved.

    However, communication is an obvious challenge associated with working from home. If your office is located in Liverpool, but a member of your team works in Lisbon, it’s difficult to gauge if one phone system will work for all.

    With an effective call answering system, callers can call one company number and get in touch with everyone on the team, regardless of employee location. Even if you run a completely virtual organisation, a call answering system allows...

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    4. Reduce the Amount of Time That Callers Must Wait

    Callers can grow quite frustrated when they have to wait to reach their intended recipient. However, with an automated answering service, your customers needn’t wait. Callers can instantly choose the person or department they wish to contact and subsequently leave a message for a call-back.

    5. Business Answering Systems Are Always Active
    6. You Don’t Need Any Additional Equipment
    7. Maintain Industry-Specific Services
    Maintain a List of Calls and Voicemails

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  • 6 Tips for Setting Up an eBay Business Account Jul 17, 2020

    Boasting a prestigious business address is not uncommon for most ecommerce businesses — having a virtual address can display a credible image if you’re trading online, particularly if you’re selling goods on one of the major ecommerce players, such as eBay. If you’re interested in setting up an eBay business account but unsure where to begin, follow these 6 tips and you’ll be the owner of an eBay business account soon.

    Tip 1: Select the Right Options on Sign-Up

    Before contemplating an eBay business account, you must ensure you have a sustainable foundation — an attractive business name, licence acquirement (check your local government regulations) and compilation of an effective business plan.

    Once you’ve finalised the fundamentals, you’ll have two account options on sign-up: “regular” and “business”. In order to register an eBay business account, click on the...

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    Tip 2: Adhere to eBay’s Terms

    Under the Unfair Commercial Practices Directive (April 2008), a UK business cannot claim to be a private individual for the purpose of selling their services and products. For the importance of transparency, eBay states that an eBay business account should be operated in the following situations:

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    Tip 3: Provide the Correct Details

    When setting up an eBay business account, you’ll need a UK postal address or a UK landline telephone number as well as a bank account that accepts direct debit instructions. Your address and landline will be used to confirm your registration. The bank account allows eBay to receive seller fees when you sell items.

    If your business is VAT registered, you should provide your...

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    Tip 4: Create Your First Auction
    Tip 5: Open an eBay Store
    Tip 6: Know the Tax Implications of an eBay Business Account

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  • 4 Tips to Boost Your Business Brand Jul 9, 2020

    Marketing, marketing, marketing! Once you’ve completed your company formation, the “M” word will be the catalyst to building customer awareness and boosting your brand. If you’re frantically searching Google to “advertise my business”, then take note of the following marketing tips and you’ll soon understand what it takes to increase sales and growth without the need to research much further!

    1. Scrutinise Your Marketing Strategy

    There’s little use in having a viable business product if you can’t obtain profit-generating sales. Therefore, an effective marketing strategy is key. One way to assess whether your marketing strategy is (still) effective is to calculate the average lifetime value of a customer (LTV).

    For example...

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    2. Create a Detailed Plan

    You don’t achieve results in business through guesswork. Every business target and goal should be planned and adhered to. Creating small incremental goals can be highly impactful and morale-boosting on your journey to boosting sales.

    Exercise: Create a weekly checklist to keep you...

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    3. Time Your Marketing Approach Carefully

    “I want to advertise my business” is a fair question to ask, but not if you time said advertising poorly. Ever seen ice-cream trucks roaming the winter roads? You can only provide a supply to a demand. Pounce on marketing opportunities when the timing is right. For example, if you make...

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    4. Sell Your Company’s Credibility

    In order to hold a credible business stance, you need to project reputability. Ensure your potential buyers and investors perceive you as a worthy entity from which to buy. This is where you can truly help yourself in answering the question of “how to advertise my business?”

    Exercise: Hire a copywriter and create SEO-friendly blogs for your website. Be sure that they are optimised. Once you’ve compiled quality, informative and “Google-friendly” blogs, begin article outreach whereby you...

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  • This Is Why a Written Resolution Is Important Jun 30, 2020

    If you thought organising meetings is a common necessity for forming a company, wait until your company is in full swing; meetings and minutes await! For all those company-affecting critical decisions, you’ll be holding a number of general meetings and board meetings involving company members and directors; these meetings must be compliant with company law and follow the correct procedures.

    Any decisions (resolutions) made in these meetings must be accurately recorded and, in some situations, directors must also report certain meeting-matters to Companies House. However, some resolutions can be passed in writing rather than at a general meeting.

    What Are the Different Types of Resolutions?

    In order to pass company resolutions (they may be “ordinary” or “special”), shareholders have to vote for or against a proposed course of action. This process can take place either at a general meeting or by a written resolution.

    Before we get to a written resolution, here’s an overview of both an ordinary and special resolution:

    What Is an Ordinary Resolution?

    Ordinary resolutions are passed if a simple majority (above 50%) of the votes are cast in favour of the resolution. Provided that the Companies Act or the articles of association does not state the need for a special resolution, an ordinary resolution will be used for any decisions made by directors and shareholders.

    An ordinary resolution requires...

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    What Is a Special Resolution?

    Special resolutions are used for unique or sensitive issues. The Companies Act 2006 and the articles of association will both explain which decisions require a special resolution. A special resolution may only be passed when at least 75% of shareholders vote in favour of the resolution.

    A special resolution may be used for the following:

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    What Is a Written Resolution?

    A written resolution can be either ordinary or special and is passed in writing rather than being passed at a general meeting whereby members cast votes in person or by proxy. A written company resolution may be proposed by a director or any shareholder who owns at least 5% of the voting rights in the company.

    Invariably, written resolutions can be used for all decisions in a private limited company apart from the decisions to remove a director or an auditor.

    Note: Public limited companies (PLCs) cannot use the written resolution procedure.

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  • This Is How You Close Your Company Jun 17, 2020

    The process of starting a new company is relatively straightforward, especially when you use the services of a formations team to setup a company — you’ll be trading and selling your products in no time at all.

    However, the process of closing your company can be comparatively complex with a number of stipulations to bear in mind. We’ll outline everything from how to close a limited company that never traded to an established limited company, and whom to contact when you’re ready to cease trading.

    Closing Down a Limited Company

    Before we explain how to close a limited company that never traded, it’s vital we look at the factors associated with closing down an established, limited company so you can draw necessary comparisons depending on your company’s status.

    Closing a limited company mainly depends on two things:

    · Is it solvent?
    · Is it insolvent?

    Strike a Solvent Company Off the Register

    When a company is solvent it means it is able to pay its bills (insolvent companies are unable to pay their bills). The simplest way to close a solvent company is for the company director to apply directly to Companies House in order to have the company struck off the register.

    In order to strike off a solvent company with Companies House, a few conditions must be adhered to, such as...

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    Voluntary Liquidation by Members

    Before we outline how to close a limited company that never traded, an alternative method to closing a limited company that has traded is through members’ voluntary liquidation.

    In order to close a solvent company through members’ voluntary liquidation, the directors must declare and confirm that its debts can be completely paid within 12 months from the start date of the winding-up process.

    Follow these steps when closing a company through members’ voluntary liquidation:

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    Voluntary Liquidation by Creditors

    For insolvent companies (those companies unable to pay their bills), directors can practice a creditors’ voluntary liquidation process.

    Voluntary liquidation by creditors begins with a general meeting of shareholders as is called by the director. In order to cease trading and successfully pass a winding-up resolution, a 75% majority vote from the shareholders is required. If a resolution is passed, the company must do the following:

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    Compulsory Liquidation

    For companies that cannot pay their bills and are unable to reach an agreement with creditors, a court application may be made for a winding-up petition that will aim to close down the company. The company will...

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    Closing Down a Company That Has Never Traded

    If you’ve had a dormant company from the date of registration — in which case HMRC will class it as “inactive” — then it will not be susceptible to tax liabilities like VAT, PAYE, or corporation tax. As long as you can evidentially and legally declare that your company has never traded and indulged in capital gains from trading products or selling business assets, you’ll be exempt from paying any sort of business taxes.

    However, it is recommended to contact HMRC for confirmation of your company status and understand whether closing your company has resulted in/will result in any untoward implications. Notably, you may continue to receive correspondence from HMRC at your registered office address if you do not finalise and confirm your company status.

    Dissolve a Dormant Company

    And this is how to close a limited company that has never traded! It’s a fairly simple process when you have a dormant company (a company that have never traded) as long as the majority of a company’s directors agree with the closure.

    Once the agreement has been reached to close down your dormant company, the process of how to close a limited company that has never traded is similar to the section above regarding the striking off of a company: a director must request and submit Form DS01, which should be filed with Companies House for a £10.00 fee. The following details will be required:

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  • What Is a Holding Company? Jun 12, 2020

    Invariably, when you’re starting new company, it’s for the purpose of trading (buying and/or selling goods). However, some companies, that on the surface seem like a conventional trading entity, are quite the opposite — they simply own assets without trading. And there’s your “holding company”.

    What Does a Holding Company Do?

    Generally, a holding company is a company that deals specifically with assets, investments, and management, rather than directly buying or selling goods and services to muster profit from the sales of products. Essentially, a holding company does not have any trading operations or activities.

    A holding company typically has the responsibility to supervise and manage other companies, in addition to, or instead of, holding shares and receiving dividends from their shareholdings. Other than this business practice, a holding company will not exercise any other form of business activity.

    What Assets Does a Holding Company Own?

    Since a holding company’s main function is to own assets and not buy or sell goods, they typically own a number of entities; invariably anything with a value can be owned by a holding company as an asset. For example:

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    How Does a Company Qualify as a Holding Company?

    According to the Companies Act 2006 (sec. 1159) a company will be considered to be a subsidiary of a holding company if the following are true:

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    What Are the Tax Advantages of a Holding Company?

    Since many share disposals and dividends enjoy tax exemptions, a key attraction to a holding company is its potential tax savings.

    A holding company can dispose of its shares without the consequence of tax liability if it owns a “significant shareholding” of at least 10% of the ordinary shares in a subsidiary for a period of 12 consecutive months during a two-year period preceding the disposal. The requisite being that both the holding company and its subsidiary are active companies for a 12-month period pre and post disposal.

    Additionally, a holding company can enjoy tax exemptions for VAT-taxable supplies if a holding company:

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    How to Register a Holding Company

    Just as you would set up a private company or a company limited by shares, a holding company must go through the same set up process. You have to legally incorporate your business at Companies House and submit statutory filing requirements in a timely manner.

    Some of the details you might need to hand when it comes to registering your company, include:

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    What Can I Use as a Company Name?

    An Example of a Holding Company

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  • This Is Why Companies House Must Know You’re Moving Jun 5, 2020

    Once you’ve completed the processes of forming a company and have begun trading, you must consciously maintain good business housekeeping: staying on top of your records, correct filing, updating the necessary bodies etc, with Companies House in particular requiring such up-to-date information.

    When you change your address (even if it is your personal residential address) it is absolutely necessary as a company director that you inform Companies House of the new details — this is true even if your home address is not used as your registered office address.

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    But Why Does Companies House Need to Know I’m Moving?

    Since the running of a UK company is based on transparency and open communication, a person of significant control (PSC) is required to provide such important details to Companies House.

    The reason business owners need to...

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    Inform Companies House of a Director’s Home Address Change

    Updating your address details is not a difficult task and can be done by visiting the relevant Companies House section of GOV.UK. You will not be charged a fee to update this detail and where relevant, any updates will be displayed on public record within 24 hours of making the necessary update.

    Simply head over to Companies House online and complete the form “CH01 Change of Director’s Details”. You must do this within 14 days of the relevant address change. Be sure to have the following details available when completing the form:

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    Inform Companies House of a PSC’s Home Address Change

    In order to update the residential address of a person with significant control, you must complete the form “PSC04 Change of Details of Individual Person With Significant Control”.

    The amendment must be made with Companies House online and submitted within 28 days of the change of address. Be sure to have the following details available when completing the form:

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    How to Apply for Disclosure Exemption From Companies House?

    If your residential address is used as your company’s registered office address, Companies House will not be able to remove your home address from the company register. However, there are certain circumstances where directors and PSCs can request Companies House for the removal of their home address details (when it is used as their service address) from the public record. Additionally, you can...

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  • Pros and Cons of Being VAT Registered May 29, 2020

    When starting a new company, be prepared to adhere to a number of inevitable legalities, such as your VAT registration. You must legally register for VAT when your taxable turnover (not your profit) for the previous year exceeds £85,000 (or is expected to do so within the following 30 days).

    However, some small companies may choose to voluntarily register for VAT even though their taxable turnover will not exceed £85,000. And before we outline the pros and cons of being VAT registered, let’s briefly observe the definition of VAT.

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    VAT Defined

    VAT stands for “value-added tax” and is a consumption tax placed on a product whenever value is added at each stage of the supply chain. For UK businesses that are VAT-registered, there is a VAT charge on the majority of products and services they provide. VAT is also...

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    The Pros of Being VAT Registered

    Since the £85,000 figure for VAT registration is a legal threshold, the discussion of the advantages/disadvantages of VAT registration seems irrelevant. However, for companies that seek voluntary VAT registration, there are a number of advantages to gain (of course, these also apply to companies who are legally required to register for VAT):

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    The Cons of Being VAT Registered

    If your company does not have a turnover that exceeds £85,000 then you needn’t worry about the following, seemingly disadvantageous, points relating to VAT registration. Therefore, when you weigh up the pros and cons of being VAT registered and consider the following cons to far outweigh the pros, you should ignore the option of voluntary VAT registration:

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    How to Become VAT Registered

    In order to become VAT-registered you have to sign in to HMRC Online Services — it’s a fairly straightforward process and takes HMRC approximately two weeks to process the application.

    Notably, you’re not permitted to...

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  • Shares and Shareholders Explained May 22, 2020

    When forming a company, you’ll have to familiarise yourself with your shareholding company’s key terms and definitions, including “shares” and “shareholders” and what these terms mean for your business.

    In order to understand the duties and responsibilities of a shareholder, it’s important to recognise just what those shares are with simple examples of their purpose in a shareholding company.

    What Are Shares?

    Shares are a part or “portion” of a company that is limited by shares and is simply a divided-up unit of the value of a company (each share is a specific percentage of the entire business). The shares owned by individuals of a shareholding company are called “shareholders” or “members” (more on “shareholders” later).

    How much of a company is owned or controlled by a member is reflected in the number of shares that the member holds. Typically, shareholders receive a percentage of trading profits in relation to their ownership percentage.

    What Is the Value of a Share?

    Shares have both a market and nominal value — the difference between each is known as a “premium”.

    • Nominal value
    The nominal value of a share, which is typically £1, is the sum that a member has either paid or agreed to pay for their segment/portion of the company. This sum is the reflection of how much a member would legally need to pay towards company debts or when the company suffers a winding up order. Therefore, the “limited liability” of a company’s owners is reflected in the nominal value.

    • Market value
    A share’s market value is simply the amount it is worth at the point of being sold. This figure will invariably differ from the nominal value.

    How Many Shares Can be Issued by a Company?

    One (1) is the minimum number of shares that a company may issue. This is normal when an individual sets up a limited company and is the sole owner and director. There is no upper threshold, therefore...

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    Can Different Types of Shares Be Issued?

    Owners of a shareholding company can form and issue whatever type of shares they like. This can be done during company registration or once your company has been incorporated. Many companies prefer...

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    What Is a Shareholder?

    Shareholders are any individuals who own shares in a shareholding company — that is, a company limited by shares.

    Limited company shareholders (members) form an agreement to become part of a company by investing in at least a minimum of one share.

    The number, and value, of shares held by a member reflects...

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    Who Can Become a Shareholder?
    What is the Difference Between a Shareholder and Subscriber?
    What Are the Roles of a Shareholder?

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