Key facts for public limited company
- UK Registered address
- One qualified company secretary
- Two director (person or corporate)
- If there is only one director he cannot be at the same time the company secretary
- It must have an authorised share capital of at least £50,000. Before it can start business, it must have allotted shares to the value of at least £50,000. A quarter of them, £12,500, must be paid up. Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium
- General Trade in the memorandum and article of association
- Company statutory books must be maintained properly
- There are two authorities that your company is accountable to one is the Inland Revenue where your taxes and tax return must be file and the second one is the Companies House where your company is registered and abbreviated accounts must be file. Failure to file accounts on time will result in penalty being imposed.
- VAT - Must registered when business turnover reached £64,000
- Accounts - after the accounting period end which is 12 months from the date of incorporation you will have 9 months and 1 day to pay the corporation tax and file the corporation tax return and 7 months to file the accounts with the Companies House
- Tax rate on net profits are: 20% for the first £300,000, 30% when profit is above £1,000,000, there is a marginal relief rate for profit between the two figures
Public Limited companies
- What is a public limited company?
A public limited company is a company which is registered as such and complies with the following:
- It must state that it is a public limited company both in its memorandum and in its name.
The memorandum must contain a clause stating that it is a public limited company and the name
must end with 'Public Limited Company' or 'PLC' (or if it is a Welsh company, the Welsh equivalents
'Cwmni Cyfyngedig Cyhoeddus' or 'CCC').
- For public limited companies that are also community interest companies (CICs) the name must
end with 'community interest public limited company' or 'community interest p.l.c.' (or if it is
a Welsh company, the Welsh equivalents 'cwmni buddiant cymunedol cyhoeddus cyfyngedig' or 'cwmni
buddiant cymunedol c.c.c').
- The memorandum must be in the form specified in Table F of the Tables (see question 4, chapter
1) or as near to that form as circumstances permit. (A sample memorandum for community interest
companies can be found on the CICs website at www. cicregulator.gov.uk).
- It must have an authorised share capital of at least £50,000.
- Before it can start business, it must have allotted shares to the value of at least £50,000.
A quarter of them, £12,500, must be paid up. Each allotted share must be paid up to at least one
quarter of its nominal value together with the whole of any premium.
For example, if a share with a nominal value of £1 is sold for £6, then it is said to have a premium
of £5. This premium must be paid to the company, together with a minimum of a quarter of the nominal
value of each share. That is £0.25p plus £5, making a total payment of £5.25.
- Can a PLC issue shares in another currency?
Yes, if it has passed the necessary resolutions to adopt that currency as part of its authorised capital
and given the directors the authority to allot that capital.
However, it must always have at least the authorised minimum of £50,000 sterling in issued capital,
irrespective of what other currency it uses.
A company may use as many currencies as it wishes for its share capital provided that they are true currencies.
- When can a PLC start business?
A newly formed PLC must not begin business or exercise any borrowing powers until it has a certificate issued
under section 117 of the Companies Act 1985 confirming that the company has issued share capital of at least
the statutory minimum. You can get this certificate from Companies House by completing Form 117. Once issued,
the certificate is proof that the company is entitled to do business and borrow.
- Are there any other restrictions on a PLC?
Yes. There are four main restrictions:
-
A PLC must have at least two members and at least two company directors. The secretary (or each
joint secretary) must also be a person who appears to the directors to have the necessary knowledge
and ability to fulfil the functions and who:
(a) held the office of secretary or assistant or deputy secretary on 22 December 1980; or
(b) for at least three of the five years before their appointment, held the office of secretary
of a non-private company; or
(c) is a barrister, advocate or solicitor called or admitted in any part of the United Kingdom; or
(d) is a person who, by virtue of his or her previous experience or membership of another body,
appears to the directors to be capable of discharging the functions of secretary; or
(e) is a member of any of the following bodies:
- the Institute of Chartered Accountants in England and Wales;
- the Institute of Chartered Accountants of Scotland;
- the Institute of Chartered Accountants in Ireland;
- the Institute of Chartered Secretaries and Administrators;
- the Chartered Association of Certified Accountants;
- the Chartered Institute of Management Accountants (formerly known as the
Institute of Cost and Management Accountants); or
- the Chartered Institute of Public Finance and Accountancy.
-
A PLC normally has only seven months after the end of its accounting reference period to deliver
its accounts to the Registrar. A civil penalty will be incurred if it delivers accounts to Companies
House after the statutory time allowed for filing.
-
A PLC cannot take advantage of many of the provisions and exceptions applying to private companies
under the Act, such as audit exemptions for small private companies.
-
A PLC cannot apply for voluntary strike-off under section 652A, Companies Act 1985.
- What then is the advantage of a public company?
A PLC has access to capital markets and can offer its shares for sale to the public through a recognised
stock exchange. It can also issue advertisements offering any of its securities for sale to the public.
In contrast, a private company may not offer to the public any shares in itself.
- Do these rules apply to an oversea plc?
Most of the above rules do not apply to a public company formed abroad. On establishing a branch or
place of business in Great Britain, such a company is governed by Part XXIII of the Companies Act 1985,
just as any other oversea company is. However, besides Part XXIII of the Act, they are also governed by
regulations in their country of incorporation, by certain parts of the Financial Services and Markets Act
2000, and by the City Code on Take-overs and Mergers.
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