“Akşamüstü Birası Ltd” Enterprise: Creating a Strategy Term Paper

Introduction

The sine quo non for setting up a company in the United Kingdom is to have relevant documents to be filed with the Companies House and to receive permission from the Registrar of Companies to commence business. Without the necessary registration of the proposed company with Companies House, it is not legally possible to commence business in this country. “A business cannot operate as a limited company until it has been incorporated as a company at Companies House. Incorporation is the process by which a new business or an existing sole trader or partnership becomes a limited company.” (Companies act 2006 guidance: Incorporation and names – GP1, 2009, para.3).

Sine quo non questions

The sine quo non-questions that have to be asked from a solicitor or expert on company formation would be as follows:

1. What are the main documents that would have to be filed with the Companies House before formally incorporating a company?
2. What should be contained in the Memorandum of Association of the Company?
3. What are the proposed content of the Articles of Association of Company?
4. What are the Registration fees that would have to be paid in order to effectuate the Registration of the Company?
5. How much time after receiving the documents by the Companies House does it take to incorporate a company?
6. What are the norms relating to online filing and how could it be operated?
7. What are the genres of documents that could be filed online?
8. Could documents be filed manually and online too? What are the rules regarding the filing of online documents in the Companies House?
9. What are the rules regarding name choice for the business? Once a name has been registered with Companies House, could it be altered by the company and the mode by which this could be done?
10. Is it true that a private company needs to have one director as an individual? What are the minimum restrictions and qualifications for becoming a director of a company in the UK?
11. Is it true that the filing responsibilities of Companies require that “Directors must prepare and file documents required under the Companies Act 2006, including the annual accounts and annual returns.” (Directors and secretaries, n.d, para.6).
12. What are the prescribed rules with regard to the Registered Office of the

Company and how are these rules enforced?

Sources of funding of new business

Perhaps one of the major issues of a business enterprise in the context of the UK would be with respect to gaining and usage of funds. It is seen that public share issues or IPO (Initial Public Offer) would be a good way of funding the company. “There are many sound reasons for wanting to go public. For instance, equity capital obtained from an initial public offering is considered a permanent form of capital since there is no interest to be paid on the equity, and it is not repayable like debt.” (Due diligence (know your client) requirements, 2006, para.7).

The future questions that need to be asked from the attorney in charge of company formation would be in terms of the appointment, reappointment and retirement of directors, both whole time and part-time directors. The appointment and reappointment of statutory auditors and the contractual obligations of such auditors also need to be known.

Constitution of share capital

Another important area would be in terms of the constitution of the share capital of the company and its structure. Shares could be of two types- Equity and Preferential shares which would be the ideal mix for this company needs to be worked out and also the nature of share capital as under.

Authorized, Issued, subscribed, and paid-up capital of the company. The authorized capital of the business is that which it is authorized by Companies House to use. Out of the authorized capital, it is possible that only a portion would be used for IPO and the balance may be used for future needs. This is called its issued capital. It is possible that the full issued capital may not be subscribed- sometimes it may be undersubscribed also. The full subscribed capital may not necessarily be paid up – it may be done after some time through calls.

Again, it would also be necessary to go in for debentures and bonds, in which case it is necessary to determine and state the relative merits and demerits of debentures and bonds and the need for their floatation.

Floating shares in the market and having the same quoted in the Stock Exchange on a regular basis has a number of advantages and benefits. Through trading in the stock exchange, it would be possible to gain competitive benefits in business and also be able to monitor the growth and prosperity of the company in later years.

Conclusions

It is seen that floatation of a company, is indeed a risky and challenging proposition and needs to be undertaken with professionals help of experts like Company Secretaries, public accountants or experts in company floatation matters. There are a lot of overt and covert aspects; especially in the case of large-scale business would not be prima facie evidence, but whose impact may be felt on the business as it progresses. Thus to avoid risks and detriments at a later date, it is necessary that due precautions be taken at the incipient stages of company formation itself.

Reference List

Companies act 2006 guidance: Incorporation and names – GP1. (2009). Companies House. Web.

Directors and secretaries. (n.d). Company Formation Registration. Web.

Due diligence (know your client) requirements. (2006). Companies Formation Worldwide. Web.