Chapati and three of his friends recently retired from the civil service under the voluntary retirement scheme. They intend taking advantage of the on-going Structural Adjustment Programmes (SAPs) going into business.
a) Advise them on the procedures they have to follow in order to register a public company limited shares.
b) Explain them how the procedure would differ from that for forming a private company limited shares.
a) Registration of a public company limited shares.
• To obtain registration the following steps are followed;
3) Application for reservation of name.
Under Sec 19 (1) of Act, the registrar may on written application reserve the name pending the registration or change of name a company.
The name is reserved for 30 days in the first instance during which time it‟s unavailable to other persons. The registrar may on application extend the reservation any number of days not exceeding 30.
Under section 19 (2) of the Act, the registrar cannot resolve or register a company a name which I his opinion is undesirable.
Note: The parties is association to form a public company limited shares have to subscribe to the memorandum.
4) Preparation of constitutive and other documents
a) Memorandum of Association:
under section 2 (1) of the Act the memorandum means Memorandum of Association of a company as originally formed or as altered: it is one of the basic/constitutive documents.
b) Articles of Association:
Under section 2 (1) of the Companies Act, articles means articles of association of a company as originally formed or as altered special resolution. Including so far as they apply to the company the regulations contained in Table A
c) Statement of normal capital:
This document is a requirement of the Stamp Duty Act Cap 490.
It contains the name of the company and the capital with which the company pro0oes to be registered. It promotes assessment and payment of duty for purposes of incorporation.
d) Declaration of Compliance
Under section 17 (2) of the Companies Act, this is a statutory declaration either the advocate engaged in the formation of the company or a person named the articles as director or secretary to the effect that subscribers to the memorandum have complied with the provisions of the Act and are desirous of being formed to a company. It sworn evidence of compliance with the provisions of the Act.
NB: In law the documents identified here in below ought to be delivered to the registrar within 14 days of registration of the company. However, in practice all the documents must be delivered to the registrar at eth same time.
e) List of directors and their consent;
The list of directors identifies the persons who have agreed to act as directors of the company. It contains:
i) The names of directors
ii) Their postal addresses
iii) Their date of birth
v) Other directorships if any.
The list must be a complied a written consent of every director to act as such. The consent must be signed the director or his duty authorized agent.
f) Notice of Location of Business It specifies
1) The physical address of the company i.e. the city or town in which the registered office is situated, plot numbers and building.
2) The postal address of the company.
3) Stamping of documents;
The Memorandum, Articles of Association and the Statement of Nominal Capital must be presented for stamping, i.e. payment of the duty payable for purposes of Incorporation. Upon payment, the duty imprint is fixed on the documents on the face of the documents.
4) Presentation of documents to the registrar;
Under section 15 of the Companies Act the Constitutive and other documents must be lodged with the Registrar of Companies for registration of the company.
5) Registration of the company and issue of Certificate of Incorporation; Under section 16 (1) of the Act, if the registrar is satisfied that the documents have been prepared in accordance with the provisions of the Act, he registers the memorandum and articles and issue a Certificate of Incorporation authenticated his seal and signature. This Certificate signifies Incorporation of a company.
b) A public company limited shares has a memorandum stating that I has been registered as such.
• The private company is the residual class of companies, without any special requirements.
• There are three requirements for registration of a company as a public company limited guarantee: These are substantial differences in the capital requirements as applied to public and private companies. They are:
1) It must state it is a public company limited shares both in its memorandum and its name. There must be a clause to that effect in the memorandum and its name must end with words “Public Limited Company” (PLC). A private company uses the traditional “Limited” or (Ltd) at eth end of its name.
2) The memorandum must be in the form specified in Table F of the Companies regulations 1985
3) The company must have an authorized capital figure of at least the authorized minimum.
• The particular, a Public Company Limited shares cannot commence business or exercise any borrowing powers unless it has actually allotted shares up to the authorized minimum and has received at least one guarantor of that amount.
• A public company must have at least two directors whereas a private company need only one.
• A private company needs no minimum capital either for registration or the commencement of business.