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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3497
Experience:  Solicitors 2 years plus PQE
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I have the following entry level, trivial questions.1)

Customer Question

Hello,
I have the following entry level, trivial questions.
1) When we create a LTD and issue 650k shares for example with a certain nominal value do we need to pay the amount in full?
2) What is the cost to issue lets say 1 month after the incorporation additional 350k shares? The new subscribers need to pay the amount in full.
3) Can we cancel issued shares and if yes what is the cost?
4) I received the certificate of shares by post. I am the only share holder (and director of a newly founded ltd). Should I be extra careful when I sign at a specific date the certificate and choose a lawyer as a witness or it does not matter at all. Could you please offer me step by step instructions how to fill the certificate. I read on the certificate that I received by post: Director ( me actually), Secretary (we do not have), Witness (should be someone here in Geneva), address ( my home address in Geneva ?) , Date (date of signing the certificate; can I sign multiple copies in different days?).
I used the services of a company that create companies and offers registered addresses. I am residing in Switzerland and I am a EU citizen.
5) My company does not have a bank account yet. Where any amount related to the shares was deposited? The value of the 650k shares is about £6,500. Will I need to pay this amount (if yes when) or it is a virtual amount?
6) What is the name of the document that I need to fill that describes my business as it should appear on companies house website? For the moment on companies house online catalog my company has no type of business
7) I received a memorantum and articles of association booklet. Is this a standard document identical for all LTDs?
8) What are the authentication codes I received?
9) What is the process to sell my shares, issue new shares and sell them? Which documents need to be signed? A solicitor does the sales act? What is the approximate cost? Is there a work around for the Director of the new LTD (me) to do everything?
Best regards,
George
Submitted: 7 months ago.
Category: Law
Expert:  Nicola-mod replied 7 months ago.
Hello,
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Nicola
Customer: replied 7 months ago.
Hello, I can wait. Thanks
Expert:  Nicola-mod replied 7 months ago.
Hello,
We will continue to look for a Professional to assist you.
Thank you for your patience,
Nicola
Customer: replied 7 months ago.
In addition, an answer to a subset of my questions is already something useful. That said, the questions I am asking are very basic I just want to make double sure. Best regards, Georgios
Expert:  Nicola-mod replied 7 months ago.
Hello,
I apologise as we have not yet been able to find a Professional to assist you. Do you wish for me to continue to search for someone to assist you or would you like for us to close your question at this time?
Thank you for your patience,
Nicola
Customer: replied 7 months ago.
Hello, I can wait until Tuesday evening. Update me please by then.
Expert:  Nicola-mod replied 7 months ago.
Hello,
We will continue to look for a Professional to assist you.
Thank you for your patience,
Nicola
Expert:  Nicola-mod replied 7 months ago.
Hello,
Please understand it is rare for us not to be able to find the right Professional to assist our customers. We can close this question and return your good faith deposit to the original funding source on request.
Please let me know how you wish to proceed and again I apologize for any inconvenience this may have caused.
I hope you will give JustAnswer a try again in the future,
Nicola
Customer: replied 7 months ago.
Hello, I offer another 12 hours. In case of failure I would like an automatic refund. I am interested in having 50% of the questzions answered for 50% of the amount paid.Please recommend another company in case of failureThanks,
Georgios
Expert:  Nicola-mod replied 7 months ago.
Hello,
Please understand it is rare for us not to be able to find the right Professional to assist our customers. We can close this question and return your good faith deposit to the original funding source on request.
Please let me know how you wish to proceed and again I apologize for any inconvenience this may have caused.
I hope you will give JustAnswer a try again in the future,
Nicola
Customer: replied 7 months ago.
please close the question and return me the deposit. Regards, Georgios
Customer: replied 7 months ago.
Hello, did you proceed with the refund?
Expert:  Alex J. replied 7 months ago.
Hello, My name is***** am a company law solicitor. I am happy to answer your questions if you still require any assistance?
Customer: replied 7 months ago.
Hello,I have the following entry level, trivial questions.1) When we create a LTD and issue 650k shares for example with a certain nominal value do we need to pay the amount in full?
2) What is the cost to issue lets say 1 month after the incorporation additional 350k shares? The newsubscribers need to pay the amount in full.
3) Can we cancel issued shares and if yes what is the cost?
4) I received the certificate of shares by post. I am the only share holder (and director of a newly founded ltd). Should I be extra careful when I sign at a specific date the certificate and choose a lawyer as a witness or it does not matter at all. Could you please offer me step by step instructions how to fill the certificate. I read on the certificate that I received by post: Director ( me actually), Secretary (we do not have), Witness (should be someone here in Geneva), address ( my home address in Geneva ?) , Date (date of signing the certificate; can I sign multiple copies in different days?).
I used the services of a company that create companies and offers registered addresses. I am residing in Switzerland and I am a EU citizen.
5) My company does not have a bank account yet. Where any amount related to the shares was deposited? The value of the 650k shares is about £6,500. Will I need to pay this amount (if yes when) or it is a virtual amount?
6) What is the name of the document that I need to fill that describes my business as it should appear on companies house website? For the moment on companies house online catalog my company has no type of business
7) I received a memorantum and articles of association booklet. Is this a standard document identical for all LTDs?
8) What are the authentication codes I received?
9) What is the process to sell my shares, issue new shares and sell them? Which documents need to be signed? A solicitor does the sales act? What is the approximate cost? Is there a work around for the Director of the new LTD (me) to do everything?Best regards,
George
Expert:  Alex J. replied 7 months ago.
Hi Thank you. I will answer these now. Please kindly give me about half an hour. Kind regards AJ
Expert:  Alex J. replied 7 months ago.
Thank you to answer your questions in turn:1) The purpose of a company limited by shares is to limit the liability of the shareholders to the paid up share capital. If you issue shares and do not pay for them they are listed as "Unpaid" in the company accounts. If the company went insolvent the shareholders could be called upon to pay the unpaid share capital. So to answer your questions, yes you can leave the shares unpaid but if the company went insolvent you would have to pay them. The company can also (be agreement of the directors) call for unpaid shares to be paid or forfeited even when the company is solvent;2) If you mean the legal costs - if you confident dealing with the paper work this is something the directors can do. All you need is an ordinary resolution authorizing the directors to allot more shares, and a special resolution suspending pre emption rights (assuming the incoming shareholders do not have any shares already). You then file a statement of capital at companies house and update the company books. This is something an accountant could probably do as well. If you did want a solicitor to do it, it should not take more than a couple of hours (for a firm outside London I would £250 plus VAT);
Expert:  Alex J. replied 7 months ago.
3) Issued shares can be cancelled but what would you want to do this for? Would it be to reduce share capital or to get back shares from shareholders you have fallen out with. If it is the later, you should just state that in the shares are redemable at the option of the company - this can be included in the articles of association;4) The date of the share certificate should be the date it is signed and witness. As director of the company you will have to sign it in front of a witness, the witness does not need to be a lawyer. The certificate is just evidence of ownership, it is not something that will cause you any great problems - your ownership is also evidence in the memorandum of association as you would have been the first subscriber on incorporation.5) So you have 650,000 shares worth 1P each. If you are leaving the shares unpaid, then they will just need to be marked as unpaid in the company books and recorded as unpaid share capital when the company files its accounts. When you form a company bank account you can pay for the shares. Alternatively just list them as paid now, and make sure you earmark £6,500 as company funds when the account is opened. See point 1) above for the risks of unpaid shares.
Expert:  Alex J. replied 7 months ago.
6) Until you start trading just put the activity down as 99999 "dormant company" - I would not be too concerned about this, when the company starts trading make sure you use a code that is vaguely relevant even if you cannot find an exact match.7) If they are listed as "Model Articles of Association" yes these are the standard articles for a new company limited by shares. They are the constitution of the company. They dictate items such how the company votes, conducts meetings, issues shares etc, what classes of share it can. These are fully amendable by special resolution - if you do amend you must send the amended ones to companies house with the resolution - they will always be a matter of public record. If you want to make private arrangements between your fellow shareholders, then you can sign a shareholders agreement, this would be a contractual arrangement and would not necessarily require filing at Companies House.8) These are to use the Companies House online web filing service . They recommend you use this to stop your company being defrauded or hijacked.9) Once shares are issued in your name, you can sell them using a stock Transfer Form called a (CON40G) - the transfer will need to be recorded on the company books only. To sell issued shares you always need a shareholders consent - where a person is a shareholder and director they must perform these roles separately (i.e when acting as a director you always act in the best interests of the company). Directors are essentially managers of the company.
Customer: replied 7 months ago.
Thank you for the replies. Some fine tuning. No extra questions.For 3) I clarify that I could do this to issue shares with different voting rights or treasury shares and for dilution reasons depending on the evolution of things. I am making fund raising and I would like to issue shares for the treasury and for the potential investors. What is the process, form to be filled and cost?
For 4) just to make sure . Director -> Signature, Witness -> signature, Name- > Name of witness, Address -> address of witness. Correct?For 7) It is written Memorandum and articles of association
For 8) The online web filing service gives access to which operations? Can we change the name of the directors, the subscribers list?!, the address?
For 9) I am planning to issue shares in the company's name (not to my name as single shareholder and director) and try to sell them to investors. Do I understand correctly this step? I plan to also issue some treasury shares to offer them if neededThanks,
George
Expert:  Alex J. replied 7 months ago.
Thank you.3) - Private limited companies cannot issue treasury shares. All you need to do is include an initial right for the director to allot for example 1000 shares for investors to subscribe for at a premium. These can be a different class of share;4) Yes that is correct.7) That is correct all companies have a memorandum and articles of association. Normally the memorandum is very short - it just says who the subscribers are;8) Web filing at the moment you can change directors, and file annual returns and accounts. I think you can file allotments of shares - if not this is certainly something that may be possible in the near future.9) A company cannot own its own shares - you can issue the shares as and when the investors subscribed for them. It is better to issue shares as oppose to selling them, because you pay stamp duty on a share sale.
Customer: replied 7 months ago.
Final issue: " All you need to do is include an initial right for the director to allot for example 1000 shares for investors to subscribe for at a premium" how do I do this? I am the director. Thanks, George
Expert:  Alex J. replied 7 months ago.
Hi, The right for a director to allot shares is contained in S.553-556 of the Companies Act 2006. As long as you are only issuing one class of share to begin with, all you need to do is pass a special resolution dis-applying your pre-emption rights and recording you to have the authority to allot X amount of shares. This can be placed with the company books. Each time you want to make an allotment record it in a board minute and make the necessary filing at Companies House (Statement of Capital). You will need to be more careful about the paper work when you issue multiple classes of shares (and when you have multiple share holders) this will require amendments to the articles of association. As long as you retain at least 75% of the issued share capital to begin you will have total control of the company,
Customer: replied 7 months ago.
I am alarmed by this: " As long as you retain at least 75% of the issued share capital to begin you will have total control of the company," i thought it was 51% . I am preparing the fund raising process and I could end up with 65%. What happens if I have only 65%? Could you also give me a reference to defend myself if challenged? You have been very helpful. Thanks
Customer: replied 7 months ago.
I am informing you that I just signed for: "Thank you for signing up for a 7-day FREE trial membership!". Thanks, Georgios
Expert:  Alex J. replied 6 months ago.
Hi thank you. I would be most grateful if you would rate my answer? If I can assist any further please let me know? Kind regards AJ
Customer: replied 6 months ago.
Goodmorning,I will certainly rate your answer.Just please address the last point I raised yesterday. A reference should be enough. A reprint follows:"I am alarmed by this: " As long as you retain at least 75% of the issued share capital to begin you will have total control of the company," i thought it was 51% . I am preparing the fund raising process and I could end up with 65%. What happens if I have only 65%? Could you also give me a reference to defend myself if challenged? You have been very helpful. Thanks"Best regards, George
Expert:  Alex J. replied 6 months ago.
Hi, Thank you. In functional terms 51% is fine, you can control many of the day to day decisions, you can remove directors etc. What you cannot do unanimously without 75% is things like, disapply pre emtpion rights when issuing shares, liquidate the company, change the articles of association. To give yourself additional control (assuming you only hold 51% of the shares), you should create a shareholders agreement that all investors must sign.
Customer: replied 6 months ago.
Hello, please observe that I rated you for the set of answers you gave yesterday. Thanks also for this answer.a)Could you please describe in layman terms "disapply pre emtpion rights when issuing shares"?
Should I expect any references from you or it is difficult? You see I need to participate to meetings and reply to questions related to these.It is also a bit unclear how 25% can block decisions of 25%. You mean I can not liquidate my company automatically but I can after following a process?Are there any other critical percentages?b) In reference to the pointyou answered yesterday:"3) - Private limited companies cannot issue treasury shares. All you need to do is include an initial right for the director to allot for example 1000 shares for investors to subscribe for at a premium. These can be a different class of share;"How this is done: "All you need to do is include an initial right for the director to allot for example 1000 shares for investors to subscribe for at a premium?"When my company was created the number of shares to be issued is 1,000,000 and I have 650k. I have the right to issue shares without any other special work?c) Could you send me an example of a special resolution document or a link for example to a google image?
Expert:  Alex J. replied 6 months ago.
Hi, Thank you. (a) When you issue fresh shares, the existing shareholders have pre emption rights - this means they have to be offered the shares first before they can be sold to a third party. These rights can be dissapplied by consent of the shareholder or by special resolution.If you want to liquidate the company at a later date you would need to pass a special resolution - when liquidating a company there is a process to follow;(b) This can be done by passing an ordinary resolution in accordance with S.553 of the Companies Act 2006 to give the directors this authority to make multiple allotments up to 100 shares - this would then be placed with the company books. You can also pass a special resolution disapplying pre emtpion rights for a maximum of 5 years;(c) https://www.gov.uk/government/publications/model-special-resolutions The one that says "Model Special Resolution to amend clauses in your articles of association" is a good template to show you the form. You can pass these relatively easily when you are the only shareholder, but when you have other shareholders you will need to either call general meetings or circulate written resolutions.Thank you for your feedback, could you also kindly rate my answer with either 3 to 5 stars? I am happy to assist any further. Kind regards AJ

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