When you’re starting up a new business, you often end up focusing an enormous amount of attention on things that might make a difference aesthetically, but not so much when it comes to the nuts and bolts of your operation. One of which is the key legal documents for your company.
You agonise over the spelling of the company name, how the logo will look, what colour the employees will wear; meanwhile huge gaping holes persist on the ground floor of your operation; the sort of things that, if not rectified, will cause a complete collapse before you know it. There were 146,987 incorporated companies in the UK in the last three months of 2016. If they all did it right, so can you.
A huge area of concern that many people often overlook is the legal aspect of making sure your company is in compliance with the laws of the UK. If your company doesn’t exist legally, it’s not worth any more than the land it’s built on.
Here’s a deeper dive into three absolutely necessary legal documents for your company must have a firm grip of immediately in order to get everything setup properly:
1. Certificate Of Incorporation – Legal Documents For Your Company
The Certificate of Incorporation is a bit like getting your high school diploma. You’ve done all the hard work, and now you need to this bit of paper framed to make it all official. The Certificate of Incorporation signifies that your business has been incorporated under the Companies Act 2006 as a legal entity. There’s no way of sending off for this form, Companies House will send it to you once your registration application has been approved. You’ll generally receive a digital PDF of the certificate within three working hours of submission.
If you don’t get it, make sure you contact Companies House about it; you’ll need it any time you want to do any of a host of financial manoeuvres including applying for any sort of loan, selling shares of the company to new investors; opening a business bank account; or selling the company.
2. Memorandum Of Association – Legal Documents For Your Company
The Memorandum of Association is a legal statement signed by all initial shareholders agreeing to form the company. The document must include a statement of compliance, and must be delivered to Companies House along with an application for registration of the company and the new company’s articles of association.
This is generally an informal document, just a single page, but it also cannot be altered once it is incorporated. It is a historical document that never changes, or when or whether original members leave the company or new members come onboard.
3. Articles Of Association – Legal Documents For Your Company
Under The Companies (Model Articles) Regulations of 2008, you must set forth your company’s rule book at inception. Fortunately, the Companies has default Model Articles to fill out to make it easier not to spend too much time/money on this endeavour. If you want to make your own rules, that’s fine too, as long as they aren’t illegal in the first place (no drawing and quartering interns who forget your doughnut order).
Final Words: Three Must Have Legal Documents For Your Company
Don’t start and run a business without these key legal documents for your company. Without them, you place your business at serious risk of legal problems that are easily avoided.
Would you like to find out how you can ensure your company doesn’t violate any UK laws? Then book a free Startup Legal Session by clicking below.