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BUSINESS ORGANISATIONS AND AGENCY 363 COMPANIES A private company is any company that is not a public company. The vast majority of companies in the UK are private companies limited by shares. Private companies have the word “limited” or the abbreviation “Ltd.”, at the end of their names. A private company may have only one member and one director (who may be same person) and does not need to have a secretary. A private company may not publish an advertisement offering its shares to the public. Private companies are less regulated than public companies. 19.7.4 COMMUNITY INTEREST COMPANIES Under s. 6 CA 2006, a company limited by shares or by guarantee with or without a share capital may become a community interest company. Community Interest Companies (CIC) were first introduced in 2005 by the Companies (Audit, Investigations and Community Enterprise) Act 2004 for the use of people who want to conduct business or other activities for community benefit and not purely for private advantage. In order to be registered as a CIC, an association must pass a “community interest test”. This means a demonstration that the company’s profits will be used for the benefit of the community in whose interest it is being set up. For this reason, there would be a statutory “lock” on the assets and profits of the company, meaning that transfer of its assets would be restricted. The company’s assets must be retained within the company for the benefit of the company; and if any transfer of asset is to be undertaken, such a transfer must comply with the rules laid down in the statute. In addition, the company must file an annual report to the Registrar of Companies explaining how their activities have benefited the community as well as the involvement of their stakeholders. A CIC regulator is responsible for ensuring that CICs comply with their legal requirements for registration and operation. More information on CIC and how to establish one could be found at . 19.8 CHAPTER SUMMARY To be a company, an association or business must be registered under, or recognised by, the Companies Act 2006 as such. • A company may come into existence by royal charter, statute or registration, but most companies are registered. • To be registered as a company, the promoters must submit to the Registrar of Companies a memorandum of association, an application for registration, and a statement affirming compliance with the provisions of the Companies Act 2006. • A company may be public, private or community interest; limited or unlimited; or limited by shares or by guarantee. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY COMPANIES 364 • A promoter is the person who undertakes the formation of a company and does the necessary things to bring this about. A promoter is a fiduciary and must act in the interest of the company being formed.
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  • Fall '19
  • Corporation, Managing Partner

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