Advantages of Limited Liability Company Formation
Registration carries a number of substantial benefits to small and medium sized businesses effectively creating a new corporate body which is a distinct different business vehicle to the owners of the business. Shareholders who are protected from unlimited personal liabilities in the majority of circumstances and can carry significant tax advantages which vary from year to year.
Incorporation does carry additional legal responsibilities to that of being self employed. Company formation requires the submission of the incorporation details to Companies House which must be updated and confirmed each year through the Companies House Annual Return. Audited financial accounts must be filed annually both with Companies House and the Inland Revenue. And the provisions of the various Companies Acts must be adhered to by the directors responsible for the affairs of the Limited Company.
Every limited liability company must have formally appointed company officers at all times. A private limited company must have at least one director. The articles of association may require more than one, and each company must have at least one designated secretary. While a director can be the company secretary a sole director cannot.
Forming a Limited Liability Company
Starting a limited liability company in the UK requires the submission of forms, 10 and 12, plus a memorandum and articles of association to complete the company formation and registration. Companies House Form 10 provides details of the first directors and intended situation of the registered office. A name check should be carried out with Companies House to ensure the proposed name is available and suitable and the proposed limited company name entered on form 10 with limited as the last word. Also check addresses and post codes with Royal Mail to avoid the registration being rejected. Companies House form 10 must be signed by either by or on behalf of the subscribers to the memorandum of association.
Companies House Form 12 is a legal declaration that the formation details are true and can be signed by a solicitor engaged in the limited liability company formation or a person named as director or designated secretary on form 10 under section 10 of the Companies Act 1985. The Memorandum of Association sets out the objects and scope of the proposed company stating the name with details of the subscribers to the Memorandum of Association witnessed.
Table A is a standard format of a set of Articles of Association, a statutory document that governs the internal affairs of the limited liability company and it is recommended that Table a, Articles of Association is adopted in its entirety. Following a final check to ensure accuracy submit all 4 documents to Company House with the company registration fee and the company formation is complete.
Corporation Tax Advantages
Sole traders pay income tax on the net taxable profit which will be reduced from 22% to 20% from 1st April 2008 on net profits earned over the personal allowance. A limited liability company pays corporation tax which is a tax payable on the net profit. The taxation advantages and disadvantages change from year to year as government policy in relation to tax rates and allowances change.
From 1st April 2007 the rate of Corporation Tax for small businesses was increased from 19% to 20% and is set to increase further from 1st April 2008 to 21% and further to 22% from 1st April 2009. These tax changes narrow the gap between the tax payable on profits by sole traders and limited companies. The taxation balance for businesses earning in excess of 34,840 pounds before the owners / directors wages remains in favour of incorporation since the self employed profit is also subject to 8% national insurance in addition to the 20% tax which rises to 40%. The scale of the tax advantage by being incorporated is dependent upon the level and expected level of net profit.
Generally self employed businessman paying tax at the lower income rate of 20% would not gain a significant tax advantage the main difference being the national insurance of 8%, while anyone paying the personal tax rate of 40% would show significant tax advantages compared to the corporation tax rate of 20% in 2007 rising to 22% by 2009.
Advantages of Limited Liability
A sole trader receives no protection from the business liabilities should the business run into financial problems whereas the liability of the shareholders in a limited liability company is limited to the amount subscribed for that shareholding. Liability becomes less clear in reality. Banks and credit institutions often require directors of a small and newly formed limited liability company to provide personal guarantees against loans and credit.
In addition directors should be aware when starting a company that should financial difficulties present themselves and insolvent becomes a real prospect the directors themselves may be financially liable for any debts incurred if the company continues to trade after the directors became aware the company was insolvent. This is why administrators of companies that go into liquidation often immediately cease trading to avoid themselves as administrators being held liable for any subsequent debts being incurred.
Terry Cartwright, a Chartered Company Secretary, provides inexpensive company formation packs at http://www.diyaccounting.co.uk/company.htm and a limited liability company formation incorporation service at http://www.diyaccounting.co.uk/company.htm for individuals starting a limited company
Rules Governing Articles Of Association And Company Formation
The Articles of Association of every company must adhere to certain administrative rules in that they must be printed and divided into paragraphs numbered consecutively. When submitting the Articles of Association to Companies House during a company formation they Articles must also be signed by the same persons who have signed as subscribers to the company formation Memorandum of Association.
The Articles of Association is a long document set out in a specific manner and covering items such as the issue and allotment of shares and capital, procedures to be adopted at meetings, borrowing powers and precise details relaying to the office of director. It is normal for the Articles of Association to state rules on the appointment, voting and removal of directors.
A company limited by shares can adopt a standard set of Articles, Table A. When a new company limited by shares is being formed and adopts Table A unmodified it is not required that the new company submits Articles of Association. However when adopting Table A unmodified the persons forming a company must include a letter to Companies House stating that the Articles of Association, Table A are being adopted in unmodified terms.
Table A is a standard set of Articles of Association for a company limited by shares. The unmodified Table A can be changed at a later date after the limited liability company formation by special resolution which should be approved by the members in a general meeting.
After passing the special resolution to change the Articles of Association a copy of that resolution must then be registered with the Company registrar. In addition all future copies of the Articles of Association should include the modification
If Table A is adopted without modification then the company being formed must appoint at least two directors. A private company can have just one director provided the Articles of Association permit a single director in which case a modified Table A must be delivered to Companies House incorporating the changes made.
Every new limited company must have at least one director and one company secretary. A sole director may not also be the company secretary while if there are two or more directors one of those directors can also be designated and act as company secretary.
No special qualifications are required for the company secretary of a small private company. Qualifications are required for the post of company secretary in a public limited company
Different company registration rules apply for a company that is not a company limited by shares. Other model sets of Articles of Association would be applicable and must be delivered to Companies House when forming a company and completing the company registration. Tables C, D and E are Articles of Association applicable to a company limited by guarantee both with and without shares and an unlimited company.
One essential consideration every potential member of a new company should be to read and understand the provisions contained within the Articles of Association. When a business goes well and all members and directors are in agreement few problems arise. But nothing lasts forever and excluding amending the Articles of Association future directors and their relationship with each other and management of the company are governed by the Articles.
It is quite common for a company that has a controlling shareholder to adopt a modified set of Articles. Such modifications generally removing many of the restrictive practises a director may adopt with other changes to voting rights.
Terry Cartwright, a Chartered Company Secretary, provides inexpensive company formation packs at http://www.diyaccounting.co.uk/company.htm and a limited liability company formation incorporation service at http://www.diyaccounting.co.uk/company.htm for individuals starting a limited company.
Simple Way to Limited Liability Company Formation
Starting a limited liability company in the UK requires the submission to Company House forms, 10 and 12, plus a memorandum and articles of association to complete the company formation and registration.
Companies House Form 10
First directors and secretary and intended situation of registered office
Company formation Form 10 is where the details of the first director(s), company secretary and the proposed registered address of the proposed limited liability company are recorded. Details required include the names and addresses of the officers and in respect of directors the date of birth, occupation and details of other directorships held within the last five years.
Before submitting the registration forms visit the Companies House website and carry out a name check to ensure the name is suitable and available. Names similar to existing companies are unsuitable as are any names likely to cause offence. On form 10 enter the proposed limited liability company name in full including Limited as the last word and the proposed registered office.
A company registered office is the address where Companies House can send letters to the limited liability company after the company formation. Enter the names and addresses of the Company Secretary, and the Directors in alphabetical order. Companies House reject registrations with invalid addresses. It is recommended that all addresses and postcodes are double checked before submission on the royal mail site which is a check Companies House will also carry out.
Form 10 must be signed and dated by each officer and each subscriber to the Memorandum of Association or by an agent on behalf of all the subscribers to the Memorandum of Association.
Companies House Form 12
Declaration on application for registration
Company formation Form 12 is a statutory declaration that all legal requirements relating to the incorporation of the company has been complied with. This declaration can be signed by a solicitor engaged in the formation of the Company or a person named as director or secretary on form 10 under section 10 of the Companies Act 1985.
The Declarant signature on form 12 has to be signed in front of and confirmed by a Commissioner for Oaths, Notary Public, Justice of the Peace or Solicitor. The date and signing of form 12 must be after all the other documents are signed and dated as form 12 is a legal declaration that the details being submitted are true. The form must clearly show if a person has signed on behalf of a corporate director. If it appears that the person who signed is not a director, this will cause delay.
Memorandum of Association
Every company formation requires a Memorandum of Association which is the record of the limited liability company name, where the registered office is situated and the objects of the limited company. The memorandum of association objects clause can be as simple as to carry on as a general commercial company. On the first page of the Memorandum of Association enter the Company Name.
The Memorandum of Association includes the number of shares being issued which can be any number the subscribers feel appropriate. On the final page enter the name and addresses of the subscribers to the Memorandum. These are the persons who are taking up the first shares in the company. The number of shares issued to each subscriber can be set at one share each. This can be changed to whatever arrangement is required provided the total number issued is less than the total number of shares.
The company’s memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature. Also enter the name and address of the witness to the subscribers who has signed Memorandum of Association. This witness can be any third party able to witness and confirm the signatures are correct.
Articles of Association
The standard Table A, Articles of Association, is a statutory document that governs the internal affairs of the company and it is recommended that Table A is adopted in its entirety when starting a limited liability company.
If the Articles of Association is unmodified then it is not strictly necessary to send this document with the documents for registration. However if the Articles of Association are not submitted a letter has to be sent with the application stating that Table A without modification is being adopted. It is easier to simply send the unmodified Table A. If Table A is adopted without modification at least two directors must be appointed
If the company will have only one director then Table A should be modified to reflect this and submitted with the other registration documents. The articles of association delivered to the Registrar must be signed by each subscriber of the proposed limited liability company in front of a witness who must attest the signature.
Submitting the documents for registration
When Forms 10 and 12 and the Memorandum of Association have been completed and checked they should be posted to Companies House with the company registration fee to register the new limited liability company. The standard limited liability company registration fee is currently 20 pounds, 2007
A limited company registration is normally completed within 7 to 10 days when the Certificate of Incorporation will be sent to the Company registered office. Same day incorporation is possible at a registration fee of 50 pounds. If the express same day service is required the envelope should be marked for the attention of New Companies Section and Same Day Incorporation
Terry Cartwright, a Chartered Company Secretary, provides inexpensive company formation packs at http://www.diyaccounting.co.uk/company.htm and a limited liability company formation incorporation service at http://www.diyaccounting.co.uk/company.htm for individuals starting a limited company
Brain Food For Better Productivity In The Afternoon
If you were like many people you hit an afternoon slump. Concentration wanes and productivity drops severely. For many people this is a significant told on their business productivity. There’s a simple relatively easy way to avoid this energy drain. Try feeding your brain instead of your mouth. Coffee, sodas and energy drinks just don’t have the same affect that super nutrition can give you. You want a very productive afternoon that doesn’t dehydrate you or give you the jitters.
Concentrated nutrition can improve your concentration.
Best way to teach our brain and your body is of super green Foods. Super green energy powder drinks are concentrated form of nutrition. They come from a mixture of plant materials naturally packed with nutrients. One of the main ingredients is a blue green LG called spirulina. Spirulina is a microscopic alga that contains literally all of the nutrients the human body can use. It is packed with an amazing variety of nutrients.
Your brain need specific food to function properly and a super green food can give you all the nutrients you need to blast through your day at full speed.
Your brain and your body need a lot of vitamins, especially vitamin B, and amino acids in order to function at full capacity. Many people feel a slump after lunch because their body is trying to process carbohydrates, fats and sugars. Instead of getting that boost you need to make the best of your day your body is busy trying to absorb the flood of glucose you had for lunch. This leads to a quick up in a very hard crash. Keeping your blood sugar level balanced is important if you plan to stay awake and alert to two finish your day.
Give your brain the food it needs.
The next time you want to grab another cop of coffee, soft drink, candy bar or so called energy drink, try making a super green shot. Supergreen food delivers its nutrition in a concentrated completely bio available way. This means your body warm can absorb and digest the nutrition immediately and easily. A super green Food shot is simply a couple of juice with a tablespoon of super green energy powder. Add a cube of ice and shake to stir. Drink this down and follow with a glass of water.
Water is another important factor in brain food and productivity. Many people think that just speak all as they drink a soda or coffee that there’s staying hydrated. Not true. Your body needs fresh filtered clean water every day. There is no other substitute for drinking water. Every system in your body works in a water medium including your brain. Your brain especially needs water to send the signals from your brain to the rest of your body. One of the first symptoms of dehydration is mental confusion and sleepiness.
Keep your brain hydrated.
The next time you start to lose concentration and focus try drinking a glass of water. Keep yourself hydrated all day long. Start your morning all of the day glass of water before coffee. Don’t wait to get thirsty before you try drinking a glass of water, by the time you feel it your body is already becoming dehydrated.
People are working longer hours, and on the go more than ever. Sometimes life is so hectic it feels like you’re on a hamster wheel and you can’t get off. Give yourself the energy you need to have the life you want. Make sure you have enough energy to spend quality time with your family when you get home. Be super productive at work so that you can achieve your career goals without sacrificing your health.
Super green food powder can be a real lifesaver when it comes to nourishing and supporting your body’s needs. Take the two week test; try using a supergreen food energy drink every day for two weeks. Add three glasses of fresh clear drinking water to your daily routine. You will find, like so many others, that your concentration, mental clarity, energy level and ability to focus can dramatically improve with just these two simple changes.
Green is good for snacking.
There are many super green food products available. My favorite way to take super green is in powder form. Mix it in a strong tasting juice to make it more palatable. This powdered version mixture really packs a punch. One of the things I really like about it is that I can always feel of physical boost after use it. It is also a great value, since they include nearly a third more product in their containers than the competition.
Feed your brain and your body and watch your productivity and concentration grow. Your coworkers will wonder how you do it, your boss will wonder how much of a raise to give you and your family will thank you when you no longer come home dog tired and irritable. Modern life can be hectic. You deserve to have the nutrition and the energy you need to excel in all areas of your life. There’s a reason they call it a super green food and that is because super green powders can make you feel super too.
Darren Craddock is an expert in Naturopathy, Nutrition, Herbology, Massage, and Yoga. His passion is helping you live a long healthy life with Super Nutrition. Discover the instant energy boost of Enerfood Super Green Energy Drink at http://www.enerhealthbotanicals.com