Latest News & Advice From Wisteria

What is an auditor?

An auditor is a qualified accountant who reviews whether or not proper accounting records have been kept by a company and if the financial statements are an accurate reflection of the company’s finances. Once appointed they have the right to question any officer or employee of the company and must be granted access to all financial records. It is a criminal offence to try to delay or mislead an auditor. Read full article »

Business bank account

Many new companies in the UK, particularly those set up by non-residents, struggle to open a business bank account. It is a common misconception that a UK company must have a UK business bank account. There is no legal requirement for a company to have a business bank account at a UK bank. If you struggle to open an account in the UK you could open a business bank account in your home country or you could use a PayPal account to accept payments. It is important to keep business and personal transactions separate. Read full article »

Deciding the value of shares

When incorporating a company you will be required to state the initial shareholders and you will have to state how many shares each will hold. Each of those shares will have a nominal value which is the value of the share as stated on the balance sheet. The nominal value must be paid into the company and is the shareholder’s investment in the firm. If the shareholder’s do not pay the amount on incorporation then they are liable for this amount. If the company is ever declared insolvent the liquidator can request the unpaid share capital be paid in full to cover the company’s debts. Read full article »

Holding companies and their subsidiaries

When one company owns a majority share in another company it is classed as a holding company. The company it owns is a subsidiary and are often established to conduct business in a different country or to engage in a different business activity to the parent company. Read full article »

What is a company secretary?

A company secretary is responsible for the administrative functions of the business, including updating the company register, filing the annual return and annual accounts with Companies House, share transfers and convening meetings of the board. The company secretary often advises the directors and the board on the legal aspects of any decisions to be made.  If a company secretary breaches their duties they can face prosecution or can be made liable for company debts. Read full article »

Dissolution

Dissolution is the voluntary winding up of a solvent company (a company with no outstanding debts). The directors of a firm may submit a DS01 Striking off application to Companies House which begins the dissolution process. Read full article »

What is a CIC?

A community interest company is established to benefit a particular community, such as the elderly, the disabled or the homeless. The CIC can take the form of a public limited company, a private company limited by shares or a company limited by guarantee. The company’s assets (including profits) are ‘locked’ meaning that they cannot be used or sold unless it benefits the community stated in the company articles. Previously this was only possible by applying for Charity status which had the knock on effect of limiting the activities which the organisation could carry out. Read full article »

Dividends or salary

In many small companies the only director is also the only shareholder. The question then arises as to whether that individual should pay themselves a salary or rely solely on dividends for their income. Company profits are already subjected to Corporation Tax and are not usually taxed when distributed as dividends. In contrast a salary is subject to Income Tax and National Insurance deductions. Read full article »