How to Run a Limited Company

New edition for 2012. Updated to include all the latest legislation, plus new template minutes and resolutions.

Do you run a limited company? Are you responsible for record-keeping in a company secretary role?

If you run a limited company, there is a whole range of legal duties and formalities you must follow. For the time-pressed limited company manager this can be a fraught process, as there are severe financial penalties for not complying with the limited company regulations.

This is where How to Run a Limited Company can help. This limited company guide is ideal for anyone who has taken on the role of company secretary. It provides clear advice on the limited company procedures to follow and paperwork to complete on key issues. Whether it’s appointing a limited company director, issuing shares or declaring a dividend, How to Run a Limited Company shows you how to comply with the requirements of Companies House, simply and effectively.

Most books on company law tend to be long and impenetrable. They make it hard for the non-professional company officer to see what he or she has to do. The authors have 20 years’ experience of providing professional company secretary advice, so they know the information and guidance limited company managers want. In writing How to Run a Limited Company they have honed down their expertise and knowledge into a simple guide for people who are responsible for ensuring that they keep their limited company operating within the law.

How to Run a Limited Company covers the new Companies Act. This expert guide includes a vast range of limited company advice and answers all your limited company questions including:

Limited company formation 

• How do I form a limited company?
• When a limited company is formed, what happens and what limited company forms do I need to deal with?

Limited company directors

• What are a limited company director’s status and duties?
• How do I appoint a director?

Company secretary

• What is a company secretary?
• How is I appoint or remove a company secretary?

Issuing shares and share capital

• What are the different classes of share?
• How do we increase the share capital in issue (rights issue)?

Shareholders’ meetings

• How do shareholders take decisions?
• What company resolutions do I send to Companies House?

Board meetings

• What should a typical board meeting agenda contain?
• Do all directors have to attend board meetings?

Dividends

• What is a dividend?
• How do I waive a dividend?

Plus much, much more....

How to Run a Limited Company also includes a range of limited company procedures including:

• Application form for shares
• Share issue
• Board resolution making a call on shares
• Typical minutes of Annual General Meeting
• Company resolutions to be filed at Companies House
• Contents of statutory books
• Layout of registers
• Register of shareholders
• Appointing a director
• Transferring shares
• Contract for sale of shares in a private company

And limited company template forms including:

• Memorandum of Association
• Model Articles of Association
• Old Articles Table A - introductory contents sheet
• Certificate of Incorporation
• Share certificate
• Stock transfer form

Plus this new 2012 edition is packed with even more template minutes and resolutions, including:

• Proposal of adoption of new Articles
• Proposal of name change
• Adoption of trading name
• Change of address of registered office
• Change of accounting reference date
• Change the accounting reference date

Find out all you need to know on how to run a company with this easy and expert one-stop guide.

About the Author

HM Williams Chartered Accountants have been winners of the prestigious Butterworth Tolley Best Tax Team Award. The firm has also been awarded the coveted Daily Telegraph/Energis Customer Service Award in the Professional and Business Services, Small Organisation category. In 2007, it won the 2020 award for the most innovative medium-sized UK accountancy practice.

Limited Company Links:

• DIY Limited Company Formation Kit
• Ready-Made Company Minutes & Resolutions Guide
• Stock Transfer Form Download
• Share Certificate Download

How to Run a Limited Company Contents: 

Introduction

• What is a limited company?
• What types of limited company are there?
• When should I use a limited company?
• Should I form a private or public company?

Limited company formation

• How do I form a limited company?
• Electronic limited company incorporation
• Off-the-shelf limited companies        
• I want to form a limited company but it all seems so daunting. Who can I get to help me with all this?     
• What do I need to have decided before forming a limited company?          
• Shareholders’ agreement        
• What do I have to do in connection with the business name?
• When a limited company is formed, what happens and what  forms do I need to deal with?         
• What do I have to do once the limited company has been formed? 

Limited company directors       

• What are limited company directors?    
• A limited company director’s duties and responsibilities
• A limited company director’s status
• Can a limited company director also be company secretary?    
• Is there a minimum number of limited company directors?      
• Is there a minimum age for being a limited company director?
• Is there a maximum age for being a limited company director?
• How do I appoint a limited company director?
• Do limited company directors have to retire by rotation?         
• Does a limited company director need a service contract?       
• Who actually is a limited company director?
• How can a limited company director retire or resign?
• How can a limited company director be dismissed?
• Can a limited company director get compensation for loss of office?
• Can limited company directors be disqualified for failing to deliver documents to Companies House?
• What sorts of limited company director are there?       
• Limited company directors as shareholders       
• Can a limited company director be lent money by a company?

Company secretary  

• What is a company secretary?
• What are a company secretary's duties?
• How is a company secretary appointed?
• Who may be appointed?
• How is a company secretary removed?
• How does a company secretary resign?
• What is a company secretary's status?

Limited company registered office       

Annual Return (Form AR01) 

• Deadline and filing fees         
• New for the Companies Act 2006                   

Statutory books

Limited company seal

Shares and share capital      

• What are shares and share certificates?         
• What are shareholders?          
• What are the different classes of share?        
• What is par value?      
• What is stock?
• Is there a minimum number of shareholders?
• What are authorised and issued shares?
• How do I issue shares – what’s involved?    
• Where do I keep share certificates?   
• Where do I record what shares have been issued?    
• Do shares need numbering?   
• What if a share certificate gets lost?  
• How do I deal with shares held by trustees? 
• What is a declaration of trust?           
• How do I deal with joint holders of shares? 
• Making a call on shares          
• Can shares be forfeit?
• How do we increase the share capital in issue (rights issue)?
• What happens when a shareholder dies?       
• What happens when a shareholder marries?  
• Is there a minimum age for a shareholder?    
• What happens when a shareholder goes bankrupt?   
• Do I have to pay Stamp Duty when I issue shares?  
• How do I transfer shares from one holder to another?          
• How can I reduce share capital?        
• Can a company buy back the shares in issue from existing shareholders?    
• What is a bonus issue and how do I make a bonus issue?     

Shareholders’ meetings

• How do shareholders take decisions?
• Types of meeting       
• Annual General Meeting
• General meetings       
• Right to require a shareholders' meeting        
• Notice of meeting      
• What is special notice?           
• What must the notice contain?          
• How to avoid notice?
• How do I prepare for an Annual General Meeting?  
• How do I send out the accounts to the shareholders?           
• What to do after the Annual General Meeting          
• Adjourning the Annual General Meeting      
• Sending company resolutions to Companies House     
• What are company resolutions? 
• What are the different types of company resolution?   
• What is a quorum for a shareholders' meeting?         
• Who is the chairman of a shareholders' meeting?      
• Does the chairman have a casting vote?        
• How are votes taken and counted?   
• What is a proxy?

Board meetings         

• How to hold a board meeting
• What should a typical board meeting agenda contain?         
• Do all limited company directors have to attend board meetings?       
• Is there a quorum for board meetings?          
• How is voting counted at board meetings?   
• The importance of board meetings    

Limited company accounts

• Accounting reference date     
• How can I change the accounting reference date? 
• How are accounts approved?   
• Unaudited and audited accounts
• The role of members
• Filing deadlines and fines      
• Do I need an auditor?
• What are small and medium-sized companies?         
• Who signs the accounts?        
• What accounts are filed at Companies House?         
• Dormant company accounts  

Auditors        

• Do I need an auditor?
• How do I appoint an auditor?           
• How do I dismiss an auditor?
• How can an auditor resign?   

Business stationery  

• What business stationery must show 

Mortgages and charges        

Dividends      

• What is a dividend?   
• How to waive a dividend      
• What are ‘scrip dividends’?   

Other matters

• Companies House      
• What is it?      
• The web filing service
• Protected Online Filing (PROOF)     
• Webcheck      
• Monitor          
• Resolutions that need to be submitted to Companies House
• Striking off
• Company restoration
• Limited Liability Partnerships           
• Second filing of a document previously delivered
• Community Interest Companies (CICs)

Limited company procedures and templates:

• Pre-incorporation checklist
• Investors’ aspiration form
• The likely headings in a shareholders’ agreement
• Notices – how to display
• Particulars of ownership
• Situation of registered office
• Dividends
• Waiver and release of dividend
• Dividend mandate
• Application form for shares
• Letter of allotment
• Letter of regret
• Share issue
• Board resolution making a call on shares
• Letter warning of possible forfeiture
• Board resolution forfeiting shares
• Bonus issue
• Death of a shareholder
• Indemnity for lost share certificate(s)
• Declaration of trust
• Proxy form
• Company resolution appointing corporate representative
• Notice/agenda for Annual General Meeting
• Letter sending out accounts and AGM notice to shareholders
• Wording for special notice
• Notice/agenda for a general meeting
• Agreement to short notice of general meeting
• Typical minutes of Annual General Meeting
• Minutes of general shareholders' meeting
• Forms of resolution to be filed at Companies House
• Typical board meeting agenda
• Minutes of first board meeting
• Standard board minutes
• Appointment of bankers
• Approval of directors' report and accounts
• Contents of statutory books
• Layout of registers
• Applications and allotments of shares
• Register of shareholders
• Transfers
• Register of limited company directors
• Register of company secretaries
• Register of limited company directors’ interests
• Register of charges
• Debenture holders
• Directors’ residential addresses
• Register of seals
• Appointing a limited company director
• Appointing a chairman
• Removal of chairman
• Notice of appointment of alternative director
• Director’s resignation letter
• Proposal to remove director
• Letter from company to a director whose removal is being sought
• Procedure for when a company secretary resigns
• Transferring shares
• Contract for sale of shares in a private company
• Proposal of alteration of Articles
• Proposal of adoption of new Articles
• Proposal of change name
• Adoption of change name
• Change of address of registered office
• Change of accounting reference date

Sample limited company template forms:

• Memorandum of Association
• Model Articles of Association
• Contents of old Articles Table A 
• Certificate of Incorporation
• Share certificate
• Stock transfer form

‘Quick cribs’: fast answers on what to do:

• Change the limited company’s name
• Change the Articles of Association
• Adopt the New Model Articles of Association in their entirety
• Appoint a limited company director
• Remove a limited company director
• A limited company director wants to resign
• Appoint a company secretary
• Remove a company secretary
• A company secretary wants to resign
• Appoint an auditor
• Remove an auditor
• An auditor wants to resign
• Hold a meeting or AGM
• Pay a dividend
• Make a rights issue
• Make a scrip or bonus issue
• Make a call on shares
• Vary the rights of a class of shareholders
• Transfer shares
• Forfeit shares
• Create a shareholders’ agreement
• Form another company
• Waive a dividend
• Pass a written company resolution
• Make a private company public
• Change the registered office
• Issue proxy forms
• Appoint a corporate director
• Hold a board meeting
• Borrow money on company security
• Strike a limited company off
• Change the location of the limited company’s statutory books
• Change the accounting reference date

Common Companies House forms

Glossary