202 13: Company formation Part D The formation and constitution of business organisations
If a public company does business or borrows before obtaining a certificate the other party is protected
since the transaction is valid. However the company and any officer in default have committed an offence
punishable by a fine. They may also have to indemnify the third party.Under the Insolvency Act 1986 a court may wind-up a public company which does not obtain a trading
certificate within one year of incorporation.3.5.2 Private company
A private company may do business and exercise its borrowing powers from the date of its incorporation.
After registration the following procedures are important.
(a) A first meeting of the directors should be held at which the chairman, secretary and sometimes the
auditors are appointed, shares are allotted to raise capital, authority is given to open a bank
account and other commercial arrangements are made.
(b) A return of allotments should be made to the Registrar.(c) The company may give notice to the Registrar of the accounting reference date on which its
annual accounts will be made up. If no such notice is given within the prescribed period,
companies are deemed to have an accounting reference date of the last day of the month in which
the anniversary of incorporation falls.4 Statutory books and records
4.1 The requirement for public accountability
The price of limited liability is greater public accountability via the Companies Registry, registers, the
London Gazette and company letterheads.Under company law the privileges of trading through a separate corporate body are matched by the duty
to provide information which is available to the public about the company.Basic sources of information on UK companies
The Registrar keeps a file at Companies House which holds all documents delivered by the company for
filing. Any member of the public, for example someone who intends to do business with the company,
may inspect the file (usually electronically).
The registers and other documents which the company is required to hold at its registered office (or
another registered address).
The London Gazette, a specialist publication, in which the company itself or the Registrar is required to
publish certain notices or publicise the receipt of certain documents.
The company's letterheads and other forms which must give particulars of the company's place of
registration, its identifying number and the address of its office.4.2 The Registrar of Companies
The Registrar of Companies (the Registrar) and the Registrar's department within the Government is usually
called Companies House (in full it is 'the Companies Registration Office').
For English and Welsh companies the Registrar is located at the Companies House in Cardiff; for Scottish
companies the Registrar is in Edinburgh.
The company is identified by its name and serial number which must be stated on every document sent
to Companies House for filing.
On incorporation the company's file includes a copy of its certificate of incorporation and the original
documents presented to secure its incorporation.FAST FORWARD