Vocabulary

Annual Accounts: The company registry - Companies House – must receive a set of Annual Accounts from the Company every year. The UK tax authority – HM Revenue & Customs, formerly the Inland Revenue – must also receive a Corporate Tax Return for every 12 months of the Company’s existence. However, if the Company is dormant (i.e. inactive) it will usually not be required to submit such a Return if it informs the HM Revenue & Customs of this inactivity before the Return is due. Companies House will only require a relatively simple balance sheet for dormant companies.

Annual Return: The Annual Return – not to be confused with the Annual Accounts – is a list of company information that must be updated and submitted to Companies House each year. The Return must contain details of the Company Directors, the Company Secretary, and the Company’s Shareholders. The Return also contains information about the Company’s business sector, financial year, and other such matters. A filing fee must be paid when submitting the return. This fee is included in Anglodan’s basic corporate service package.

Company: By this is meant a ‘private company limited by shares’ (Ltd). These companies are not allowed to offer shares to the public. The minimum share capital is £0.01 although the standard share capital is usually £100, which does not need to be paid up initially. The company must have at least one Director. It also ought to have a Company Secretary (see separate explanation) although this is no longer mandatory. A Director may also be the Company Secretary if there is more than one Director of the company.

Company Register: It is a statutory requirement in England that a Register is kept by the Company of the Company’s shareholders, Directors, Company Secretary, debentures, charges on assets, mortgages, etc. This Company RegistER is not to be confused with the company registRY, which is Companies House. The Register must be kept and updated in such a way that it always reflects the current situation of the Company. The Company Register must be kept at an address in the United Kingdom.

Company Secretary: In England and other jurisdictions historically based on English Common Law, companies often have a Company Secretary. A Company Secretary is not a typist, personal assistant, or secretary in the usual sense of the word but, rather, a physical or legal person who may certify certain legal information on behalf of the Company and sign other formal documents for the Company upon the instruction of the Director(s). However, the Company Secretary is not responsible for the activities of the company as this responsibility rests exclusively with the Director(s). The Company Secretary will often be a person or a Company associated with a Company Administrator such as Anglodan Services.

Directors / Board of Directors: The Director – or the Board of Directors, if there is more than one Director – is officially responsible for the legality of the Company’s activities and must ensure that the Company is operated in the interests of its shareholders. With the responsibility comes the right to direct the activities of the Company and the signatures of the Directors therefore bind the Company. The Shareholders can always replace the Director(s) by way of an Extraordinary General Meeting or by a Written Resolution.

England & Wales vs. United Kingdom: As Scotland and Northern Ireland have legislation separate from that of England & Wales, UK companies have the option to be registered under English & Welsh law, Scottish law, or Northern Ireland law. The companies formed by Anglodan are all registered in England & Wales under English Law.

HM Revenue & Customs: This authority was created from the merger of the Inland Revenue, which was responsible for income taxation, and HM Customs & Excise, which was responsible for VAT (Value Added Tax), import duties, and excise. This is now where a Company submits its tax returns to and also where it may be registered for VAT. It is normally voluntary to register for VAT if the annual turnover does not exceed £73,000. However, if the Company registers for VAT, it must provide VAT accounts once every three months, unless it qualifies for an annual VAT scheme.

Nominee Shareholder: This is a concept commonly used in England and other countries that base their legislation on English law. It works like this: An individual or a company agrees to become the owner of a certain number of shares on behalf of an individual. However, the official Owner of the shares (the ‘Nominee Shareholder’) provides the actual – or ‘Beneficial’ – Owner with a written ‘Declaration of Trust’ that transfers all rights to dispose over the shares (and thereby the Company) to the Beneficial Owner. In this manner, the Beneficial Owner is not registered anywhere as a Shareholder of the Company but nevertheless retains control over the Company. If the Beneficial Owner should wish to become the official Owner, too, he can transfer the ownership of the shares to himself at any time, using the pre-signed and undated ‘Share Transfer Form’ that he will be given by the Nominee Shareholder at the time when the Nominee Shareholder Service is established.

Registered Office: It is a statutory requirement that all English companies must have a Registered Office in England (or Wales) where the official documents of the company may be inspected by the public. This is also the address to which Companies House (i.e. the company registry) and HM Revenue & Customs (i.e. the tax office) will send official communications, tax returns, etc.