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Basic legal requirements for limited companies

Now you have registered your new Limited Company, you must follow a number of statutory requirements to remain on the right side of Companies House and the law. Thankfully over the years the Government has simplified the administration requirements for smaller companies.

Here are some of the more prominent issues:
  • The Company Register - All companies must have a company register, often referred to as the statutory books. The company register is used to record the current directors, secretaries and shareholders, any mortgages, charges or debentures as well as any movement in shares between the shareholders and the company. The company register is usually kept at the registered office address of the company.

  • Filing of Annual Return - Every company director has a personal responsibility to deliver statutory documents to Companies House as and when required by the Companies Acts. This includes, in particular the annual return and accounts. Every company must file an annual return with Companies House at least once every 12 months. This document is a snapshot of certain information about the companys affairs (including the directors, registered office address, shareholders and share capital) as at a particular date in the year, known as its made-up date. This is usually the anniversary of the date of the companys incorporation, or the made-up date of the previous annual return registered at Companies House. The annual return must be delivered to Companies House within 28 days of the made-up date. This information is made available for inspection by the public so that they can make informed decisions about companies that they may wish to invest in or do business with.

  • Filing of Annual Accounts - As well as the annual return, every company must file a set of annual accounts which report on the performance and activities of the company during the financial year. The financial year is also known as the Accounting Reference Period. For a new company, this period starts on the day of its incorporation and ends on the Accounting Reference Date (ARD) or within 7 days either side of the ARD if this is more convenient. For all new companies, the ARD is automatically set as a year after the last day in the month that the company was incorporated. For example, if your company was formed on 12 January 2009, its financial year starts on that day and its ARD would be 31 January 2010 and 31 January each year thereafter. For a private company, the first set of accounts must be delivered to Companies House within 22 months of the date of incorporation (or 21 months for accounts starting on or after 6 April 2008). Subsequent accounts should be filed within ten months of the company's ARD (or nine months for accounts starting on or after 6 April 2008). The deadline for delivery is calculated to the exact day.

  • Certificate of Incorporation - The Companies Act states that every limited company must have a Certificate of Incorporation that is available to view upon request.

  • Company Name Plate - Every company must have a name plate displayed outside the registered office address. This is interesting as many individuals setting up limited companies work from home and often find it unnecessary to have a name plate for the company outside their house. None the less it is a mandatory requirement of the Companies Act.

  • Notification of Changes - You must notify any changes you make to the company in terms of appointing, resigning and modifying the details of directors or the company secretary. You must also inform them of any changes in allocating and repurchasing shares; increasing, decreasing or creating a new share capital; changing the articles; changing the registered office and any other change that would affect the records held at Companies House.

  • Insolvency - To continue trading under your company name when you are aware that the company is insolvent is a criminal offence and may result in criminal prosecution. Always be aware of the companys financial position and exercise the correct procedures to wind up a company.

  • Voluntary Liquidation - If you decide that you do not need a company that you have set up, you should consider putting it into voluntary liquidation or apply for it to be struck off the register.

How can I simplify my legal obligations with Companies House?

The basic principles for remaining compliant with Companies House are:
  • to make yourself aware of the important dates that will affect your company

  • to familiarise yourself with and abide by the mandatory responsibilities of the officers, which includes submitting the annual return and accounts, and informing Companies House of any changes to the structure of your company.

As well as helping you to avoid any late filing or other penalties - for the director(s) and the company - these principles should help to protect your company's reputation.

How can I find out more about my responsibilities?

Remember, whilst you may use an accountant to help with your responsibilities, the ultimate responsibility to deliver accounts and other statutory documents rests entirely with the directors.

As well as statutory forms, Companies House publishes a number of detailed guides and frequently asked questions that may be of interest to new directors and company secretaries, including:
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