Just bought a ready made company

Things you must do when you just bought a ready made company from a company formation agent. A ready made company is a limited company incorporated by company formation agents for sale. Generally, people buy a ready made company because they either like the company name or the age of the company.

Preliminary check

Go to Companies House website to check the filing history of the ready made company you would like to buy. To ensure that the company’s filing is up to date with Companies House and it has never traded since it’s incorporation.

Transfer company ownership and control

Usually, after you bought your ready made company, the company formation agent will transfer the company’s ownership and control to you. They would carry out the following to transfer the company’s ownership and control to you.

Appoint your director and company secretary

Generally, the company formation agent would ask you to provide details of at least one company director to them for your ready made company. They would submit the form AP01 to add a new director to your company. If the new director is you, after the appointment, you would be legally responsible for the company.

Thereafter, you can add more directors or a company secretary if you wish.

Terminate the existing director and company secretary

Subsequently, the company formation agent would terminate the existing director by submitting the form TM01 with Companies House. If there is a company secretary appointed, the appointment will be terminated too using the form TM02.

Shareholders information

Concurrently, you would also be required to give details of the person who will be holding your ready made company shares. Your director can also be the shareholder in this instance. The company formation agent would transfer the ownership of the existing shares to your shareholder. This would be done by filing a confirmation statement.

Company’s principal activity

Normally, a ready made company’s is registered with a dormant company SIC code. You may let your company formation agent know what would be your company’s principal business activity so that they can update the SIC code for you. Alternatively, If the company formation agent did not change the SIC code, you can change it yourself afterwards. It is very easy to add and remove SIC code when completing your confirmation statement later on.

Registered office address

Let the company formation agent know if you are not going to use their registered office address and you have your own address. They would update the registered office address with Companies House for you.

The person with Significant Control (PSC)

You would be required to provide details of the person with significant control (PSC) of your ready made company. The agent would submit the form PSC01 to register your PSC details with Companies House. At the same time, they would submit the form PSC07 to remove their PSC from your ready made company.

Your Company authentication code

Do not forget to ask for your company authentication code from your agent. This code is important when comes to using Companies House web filing service to submit your confirmation statement, company accounts, appoint directors and so on.

Your Unique Tax Reference (UTR) number

Also, ask your agent for the UTR number issued by HM Revenue and Customs (HMRC) for your ready made company. You need this UTR number when corresponding with HMRC every time.

How to request authentication code

How to request your company’s authentication code from Companies House is easy.

The authentication code is a 6 character password made up of the combination of alphabets and numbers. The code is the equivalent of your company’s director or company secretary’s signature and it is linked to your company’s number. Please keep safe of the code.

You would require your authentication code to file your confirmation statement and company accounts using the web filing service.

Forgot your authentication code

Forgotten your code? not to worry because you can request Companies House to re-send your authentication code to your company’s registered office address.

Companies House would only send your authentication code to your registered office address. They would not send your code to anywhere else no matter how hard you beg them to because the company law says so and they follow the company law.

How to request

  1. Sign in to Companies House web filing.
  2. Enter the email address and your password you registered for web filing service.
  3. Then, you will be directed to the sign in to a company page.
  4. You will see the link “request an authentication code” above the sign-in blue button. Click on it.
  5. You will be directed to Request an authentication code page.
  6. Step 1: Select where your company was incorporated. Enter your company number then click the continue button.
  7. Step 2: Review your company information displayed to make sure it is correct. Your company registered office will be displayed there. if it is correct then you click on the request code button.

How long does it take to arrive

It takes about 5 working days to reach your registered office address. If you did not receive the code after 5 working days, contact Companies House or contact us.

No access to your registered office

No access to your mails sent to your registered office address? Then you must change your registered office address immediately.

In this circumstance, you must file a Companies House form AD01 to change of your registered office address on paper. Then wait for the Registrar of Companies to approve and publish your new registered office address on the public record after that you sign in to Companies House’s web filing service to request your authentication code again. Follow the same steps above. This is a lengthy process.

Companies House propose to strike off

Companies House is proposing to strike off your company in this situation it is critical for you to avoid the dissolution and get your authentication code promptly before it happens.

Contact Companies House to explain your registered office situation in writing. Companies House would reply to you to say if they approve your request whether they have discontinued the proposal to strike off. They would specify the date your overdue company’s confirmation statement or company accounts must reach them.

Companies House would issue prosecution notice to your company directors if your company’s documents still not filed after the specified date.

Change registered office and get authentication code at the same time.

There is a way to change your registered office address and get your authentication code at the same time. Our accountants can help you.

Companies House has the discretion to allow this on a case by case basis. We will write to Companies House on your behalf to explain your situation together with supporting evidence and prepare the required documents and Companies House form for your director’s signature. You are to send the signed documents back to us then we will take care of Companies House administration for you from there.

Your company dissolved while waiting for authentication code arrived

It is possible for your company to be struck off while you are waiting for your authentication code to arrive. You can avoid this by writing to Companies House as discussed above.

Companies House would dissolve your company without hesitation if you do not communicate with them of your intention to keep your company.

Once your company is dissolved, you can restore your company through administrative restoration. You must apply to Companies House for this.

Administrative restoration

Application for administrative restoration with Companies House is straight forward. Companies House would require you to bring your company’s filings up to date. This includes your company accounts and your confirmation statement.

Prevent fraud

Prevent fraud is critical in any business operation. Business regardless of its size is vulnerable to numerous types of fraud and all these have a big financial impact on your business.

In any case, fraud can occur when there is a lack of control in place to prevent or deter it from happening. Fraud can be anything from cash misappropriation to falsification of accounting transactions including creating dummy customers for money laundering purposes.

Business owners are advised to take reasonable steps to prevent fraud. There are ways to protect your business against fraud. This includes the following:

Corporate identity theft

If your business is a limited company, keep safe of your authentication code. This code is the electronic equivalent of your company director and secretary’s signatories. You would require this code when comes to filing your confirmation statement and company accounts.

Screen Employees

You must make all necessary background checks and follow up on references, especially for sensitive positions in your business such as Finance Director who will be primarily dealing with your company financial affairs.

Train Staff

Ensure your staff are adequately trained in your standard procedures and know what to do if there are any deviations. Your staff should know who to report to when they noted or suspected fraud has occurred.

Implement Whistleblowing Procedures

Encourage, don’t punish, whistleblowers, but be aware of the possibility of staff vendettas. Care must be taken when dealing with whistleblowers.

Use The Courts When Necessary

If your company has been defrauded by an outsider you may seek a civil action first. You can obtain a court order which enables assets to be traced and frozen.

Negotiate

As an alternative to the courts, you may negotiate with the individuals involved; try asking for any fraudulently obtained money to be repaid.

Use Technology And Computers

There are various IT technological options for minimizing fraud, for instance, ability to recover deleted information from PCs, use of PIN numbers, and have layers of authorization access using passwords for different grade of employees within the company.

Stay Alert

Be aware of the possibility of fraud at all times and especially if things are not as normal as they should be, for instance, suppliers’ bills on the increase or slow collection of debts or unduly high stock levels and so on.

Two Signatories For Cheque

It would be wise to always have two signatories for signing a cheque for a certain amount of payout, and for authorizing payments via online bank accounts. This can be paid more than £20,000 require two signatories or approval of two finance managers or director.

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