diy ltd co formation

Outside the words.David Woodford

�

LimitedCompanyFormation

Do-It-Yourself

business


Do-It-Yourself

David Woodford

Outside the words.

�

Dizzy New Media LtdSuite 173, 34 Buckingham Palace Road,London, SW1W 0RE

[email protected]

Published by Dizzy New Media Ltd, 20029 8 7 6 5 4 3 2 1

First published in Great Britain byDizzy New Media Ltd, 2002

First Edition, 2002

Copyright © Dizzy New Media Ltd, 2002

ISBN Pending

Set in Gill Sans

All rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmitted, inany form or by any means, electronic, mechanical,photocopying, recording or otherwise, without the priorpermission of the publishers.

This book is sold subject to the condition that it shall not, byway of trade or otherwise, be lent, re-sold, hired out orotherwise circulated without the publisher�s prior consent inany form of binding or cover than that in which it ispublished and without a similar condition including thiscondition being imposed on the subsequent purchaser.

Disclaimer: This book is sold with the understanding thatneither the author nor the publisher is engaged inrendering legal advice. The material in this book is set out ingood faith for general guidance, and no liability can beaccepted for loss or expense incurred as a result of relyingon the information contained within.

�

� �and�Outside the words� are trademarks � of Dizzy New Media Ltd

�Whatever you can do or dream, begin it.�JOHANN WOLFGANG VON GOETHE

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Do-It-Yourself

Table of Contents1. Limited company basics ........................................................................ 8

A.What is a limited company? ............................................................................................. 8B.Ownership and control ..................................................................................................... 8C.Advantages of a limited company ................................................................................... 9D.Disadvantages of a limited company .............................................................................. 9

2. What do I need to start a limited company? .................................... 10A.What you need to incorporate a limited company ................................................. 10B.What do I need to do to incorporate my company? ............................................... 10C.What sort of company does this book provide? ...................................................... 10

3. Naming your company ....................................................................... 11A.Can I choose any name I want? .................................................................................... 11B.How are names considered the same? ......................................................................... 11C.Can a company change its name? ................................................................................ 11

4. Officers ............................................................................................. 12A.About directors ................................................................................................................ 12B.Can anyone be a director? ............................................................................................. 12C.Directors� duties and liabilities ..................................................................................... 12D.About secretaries ............................................................................................................. 13E.Can anyone be a secretary? ........................................................................................... 13F.What are the duties of a secretary? .............................................................................. 13G.Secretary�s liabilities ........................................................................................................ 13H.About the Chairman ....................................................................................................... 13

5. Share Capital ........................................................................................ 14A.What is share capital? .................................................................................................... 14B.What is authorised share capital? ................................................................................ 14C.What is issued share capital? ........................................................................................ 14D.What are shares for? ....................................................................................................... 14E.Issued vs authorised share capital ................................................................................ 15F.The subscriber shares ...................................................................................................... 15G.Share certificates .............................................................................................................. 15H.Can more shares be issued in the future? .................................................................. 15I.Pre-emption rights ............................................................................................................. 15J.Are shares the only way of getting money into the company? ................................ 15

6. Resolutions and meetings ................................................................... 16A. What are resolutions? .................................................................................................... 16B. How are resolutions passed? ......................................................................................... 16C. When do resolutions need to be used? ..................................................................... 16D. Types of resolution .......................................................................................................... 17E.Procedure for passing resolutions ................................................................................ 17F.Flow chart of procedure for passing resolutions ....................................................... 18G. Procedure for conducting board meetings (meetings of the directors) ............. 19H. Procedure for conducting general meetings (meetings of the shareholders) .... 19I. A fictional example ........................................................................................................... 20

7. About the Memorandum & Articles of Association ........................ 21A.What is the Memorandum of Association? ................................................................ 21B.How do I write a Memorandum of Association? ....................................................... 21C.Customising the Memorandum of Association .......................................................... 21D.What are the Articles of Association? ......................................................................... 22E.How do I write the Articles of Association? ................................................................ 22

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8. After incorporation ............................................................................. 23A.The first board meeting .................................................................................................. 23B.Record keeping ................................................................................................................. 23C.Inland Revenue ................................................................................................................. 23

9. Wages and Payroll ................................................................................ 25A.How do I take money out of the company? ............................................................... 25B.Salaries and wages ............................................................................................................ 25C.National Insurance .......................................................................................................... 25D.Income Tax ......................................................................................................................... 26E.The most efficient way to pay yourself ......................................................................... 26

10. VAT ............................................................................................. 28A.What is VAT? ..................................................................................................................... 28B.Do I have to register for VAT? ....................................................................................... 28C.Rates of VAT ...................................................................................................................... 28D.How is VAT calculated? ................................................................................................... 28E.When and how is VAT paid? .......................................................................................... 29

11. Corporation Tax ................................................................................. 31A.What is corporation tax? ............................................................................................... 31B.Rates of corporation tax ................................................................................................. 31C.Calculating corporation tax .......................................................................................... 31D.Capital allowances ........................................................................................................... 32E.Corporation tax self-assessment ................................................................................... 33F.When is corporation tax due? ....................................................................................... 33G.What if I make a loss? .................................................................................................... 33

12. Annual accounts ................................................................................. 35A.What are annual accounts? ........................................................................................... 35B. How do I know which documents to file? .................................................................. 35C. The all-important Accounting Reference Date (ARD) ............................................ 35D. When are accounts due? ............................................................................................... 35E. What if accounts are delivered late? ........................................................................... 36

Appendix A | Example Memorandum Of Association ........................ 37Appendix B | Example Articles of Association ..................................... 40Appendix C | Example Registers and Share certificates .................... 42

Example ordinary share certificate .................................................................................. 42Register of Members ............................................................................................................ 43Register of Directors ........................................................................................................... 44Register of Secretaries ......................................................................................................... 45Register of Directors� Interests ......................................................................................... 46

Appendix D | Notices, minutes & resolutions ...................................... 47Example minutes of directors� first meeting .................................................................. 47Example written board resolutions ................................................................................. 48Example notice of EGM...................................................................................................... 49Example form of consent to short notice of EGM ....................................................... 50Example minutes of EGM .................................................................................................. 51Example ordinary and special resolutions ..................................................................... 52Example written shareholders� electiveresolution ........................................................ 53

Appendix E | Example completed forms ............................................. 54Example of a completed form 12 ..................................................................................... 54Example of a completed form 10 ..................................................................................... 55Example of a completed form 88(2) ................................................................................ 59

Appendix F | Sensitive words and expressions .................................... 61Appendix G | Table A ............................................................................... 65Appendix H | Glossary ............................................................................ 72Appendix I | Useful Contacts ................................................................. 73Appendix J | Template Memorandum and Articles of Association .... 74Appendix K | Forms ................................................................................ 81

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Limited companybasics

1.

A. What is a limited company?

B. Ownership and control

C. Advantages of limited companies

D. Disadvantages of limited companies

u 1. Limited company basics

A.What is a limited company?

Instead of working as a sole proprietor or in a partnership, business owners can form, or �incorporate�, a limited company. The key facts to absorb

about a limited company are as follows:

� Ownership. A company is owned by shareholders who each take a number of shares. One share equals one vote which implies an equal share

in the profit as well as an equal say in the control of the company. Private limited companies are so-called because they can only sell their

shares to people known personally to the company. Public limited companies on the other hand can trade their shares on the stock exchange.

Whilst the principals of both private and public limited companies are considerably similar, this book concentrates wholly on private limited

companies.

� Separate legal entity. A limited company is a corporation, unlike sole traders and partnerships which are considered unincorporated businesses.

A corporation is considered a separate legal �person� to its shareholders, with many of the same rights as flesh-and-blood humans.

Companies can claim, for example, the right to freedom of speech and the right to sue.

� Limited liability. The limited part of the name comes from the fact that the shareholders of the company have limited liability. The concept of

limited liability was introduced to overcome the risk of losing personal wealth which is a possibility faced by people going into business as

sole proprietors or partners. Limited liability means that a shareholder is obliged only to pay for the shares he or she takes in the company.

If the company should get into debt, then the shareholders are not responsible for the debt and their personal assets cannot be touched by

the company�s creditors (people whom the company owes money to). They only lose the money they originally invested in the company.

B.Ownership and control

A private limited company must have at least one shareholder, and a minimum of two �officers�: a director and a secretary. Essentially, there is a divorce

of ownership from control. Ownership of the company rests with the shareholders, whist control of the company lies in the hands of the directors, who

are appointed by the company�s shareholders.

Chapter 1 | Limited company basics

Controlling shareholder(Owns more than 50% of the

company�s shares)

Shareholder

Shareholder

Shareholder

DirectorsSecretary

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Do-It-YourselfChapter 1 | Limited company basics

However, in practice, this division of ownership from control is not so simple, especially in small companies. For example, if you incorporate a

company and take 70% of the company�s shares, you have total control of the company (what is known as a controlling interest) and can appoint yourself

as the company�s director and make all the business and management decisions about the company yourself�and this is essentially the case in most

small privately-owned limited companies.

C.Advantages of a limited company

�� Limited liability. The shareholders are not liable for the company�s debts. They only lose the money originally invested in the shares of the

company they purchased�� Separate legal entity. The company is considered a separate legal person to its shareholders. For example, it is the company which enters

into contracts, not the shareholders of the business. It is also the company and not the shareholders which can sue or be sued in the courts�� Higher status. Limited companies are generally perceived to be of a higher status than sole proprietors�� Protection of company name. Registering a company protects your company�s name by law and prevents anyone else trading with it. This

is not the case with a sole trader or partnership.�� Continuity. If a sole trader dies or retires, his business ceases to exist. However, if one of the shareholders of a limited company dies, the

company continues to do business. Shares in a company may change hands, the management of the company may change, but the company itself

will continue. Obviously, in very small companies where there is one shareholder who is also the sole director and employee of the company

and he dies, then the continuation of the company may not be feasible as the company would rely heavily on the knowledge, experience and

skills of that person to do business.�� Shares. Existing shares can be transferred to family and friends as gifts, or sold to other people pursuant to the rules of the company�s Articles

of Association. New shares can also be created and sold as a way of raising money to finance the company�s business.�� Lower tax bill. Depending upon the amount of money you make, you may be able to cut your tax bill considerably by operating as a limited

company. This is because you can withdraw money in the form of dividends rather than as a salary or wage, and dividends are taxed in a different

way to salaries and wages

D.Disadvantages of a limited company

�� Disclosure obligations. Companies have to file their accounts annually at Companies House, as well as other information, such as details of

the company�s shareholders and copies of resolutions. This information is accessible to anyone who expresses a desire to see it, including

competitors.�� Record-keeping. Companies have to keep detailed records, such as the statutory books, minutes of meetings and copies of resolutions

which have been passed.�� Corporation tax. A company must fill in and return a corporation tax self-assessment form to the Inland Revenue every year, declaring its

liability for corporation tax.�� PAYE & National Insurance. Limited companies are legally responsible for deducting income tax and national insurance contributions from

all payments they make to employees (including directors) under a scheme known as PAYE (Pay As You Earn). The money collected must then

be paid to the Inland Revenue.

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What do I needto start a limitedcompany?

2.

A. What do I need to start a limited company?

B. What do I need to do to incorporate my company?

C. What sort of company does this book provide?

u 2. What do I need to start a limited company?

A.What you need to incorporate a limited company

aA company name. You can choose any name for your company, providing it hasn�t already been taken by an existing company (see the next chapteron naming your company)

aOne shareholder. A shareholder, or subscriber, willing to pay £1 to take at least one share in the company (this shareholder can also be thedirector or secretary)

aOne director. One person to act as a director of the company (if the company has only one director, the director cannot also be the secretary)aOne secretary. One person to act as the secretary of the company (if the company has more than one director, then one of the directors can also

be the secretary)aMemorandum of Association. This document is like the birth certificate of your company (examples supplied in this book)aArticles of Association. This is a document which contains a set of rules dealing with the internal running of the company, such as the powers and

duties of directors and the division of profits (examples supplied in this ebook)aForm 10. This form (supplied) enables you to appoint the first director and secretary of the company, and state the address of the Registered OfficeaForm 12. This form (supplied) is known as the Statutory Declaration, and must be signed by the director or secretary of the company. It is simply

a basic declaration that as a secretary or director you agree to abide by all the legal requirements relating to the incorporation of the companyaForm 88(2). This form (supplied) is required to allot the first shares to the company�s shareholdersaA fee of £20. This must be paid to Companies House for the registration of your companyaA Solicitor. Form 12 must be witnessed by a solicitor or a Commissioner for Oaths. Most solicitors charge £5 for this�phone around and do not

pay more than £10

B.What do I need to do to incorporate my company?�� Produce two legal documents�your company�s Memorandum of Association and Articles of Association�using the templates, examples and

instructions provided�� Complete forms 10 and 12�� Return forms 10 and 12, along with copies of your Memorandum and Articles of Association, to Companies House along with a cheque made payable

to �Companies House� for £20 for the incorporation fee, and within 7 days you should receive a Certificate of Incorporation�� Complete and return form 88(2) to Companies House to allot shares to the respective shareholders

C.What sort of company does this book provide?

By following the instructions in this book, you will be able to set up a private company limited by shares. You will be able to decide for yourself:�� The amount of authorised share capital�� The number of directors�� The number of shareholders and the amount of shares allotted to each shareholder

Chapter 2 | What do I need to start a limited company?

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Naming yourcompany

3.

A. Can I choose any name I want?

B. How are names considered thesame?

C. Can a company change its name?

u 3. Naming your company

A.Can I choose any name I want?

Within reason, yes. However, your company�s name...�� must end in the word limited, which can be abbreviated to ltd. If you are incorporating the company in Wales (e.g., the registered office will

be situated in Wales), then the name may be written in either English or Welsh. The Welsh word for �limited� is cyfngedig, abbreviated to

cyf., and you can use this instead of limited if your company name is in Welsh�� must not be the same as another limited company which has already been registered�� must not be deemed offensive�� must not use any of the sensitive words or expressions detailed in Appendix F�� must not give the impression that the company is associated with HM Government or a local authority

You can check to see if any other companies have already registered your choice of name by visiting the Companies House web site at

http://www.companies-house.org.uk/

and searching their names index for your choice of name.

B.How are names considered the same?

Certain guidelines apply. For example:�� Dizzy Records Limited and;�� Dizzy Records Company Limited

would be deemed the same. However,�� Dizzy Records Limited and;�� Dizzy Rekords Limited

would not be deemed the same. However, the first company could file an objection with Companies House and if they were successful, the

second company would be required to change their name. It is also important to be aware of potentially infringing a trademark. Even though a

company called McDonald�s Hamburgers Limited may not exist, you should think twice before registering it, as you could be taken to court for

trademark infringement, which is another book altogether!

C.Can a company change its name?

Once a company has been incorporated, it can change its name by passing a special resolution to that effect. More information on the resolutions and

the procedures required to pass them can be found in Chapter 6.

Chapter 3 | Naming your company

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Officers4.A. About directors

B. Can anyone be a director?

C. Directors� duties and liabilities

D. About secretaries

E. Can anyone be a secretary?

F. Secretaries� duties

G. Secretaries� liabilities

H. About the Chairman

Chapter 4 | Officers

u 4. Officers

A.About directors

Directors, like secretaries, are considered �officers� of the company. They can also be categorised as executive or non-executive. Executive directors

usually work full-time for a company, and are responsible for the day-to-day running of the company on behalf of its shareholders. They are commonly

known as managing directors or chief executive officers. Non-executive officers usually work part-time and do not play a role in the day-to-day operations

of the company. An example of a non-executive director is a chairman who is appointed just to chair meetings. A director can be someone who is not

a shareholder, but in most small companies, the director will usually have a controlling interest in the company. All companies require a minimum of

one director by law.

B.Can anyone be a director?

Anyone, of any nationality, regardless of qualifications and living anywhere in the world, can be appointed a director unless:

�� They have been disqualified by a court order�� They are an undischarged bankrupt�� They are a foreign national, subject to restrictions imposed by the UK government

For companies registered in England and Wales there is no minimum age restriction, however directors of companies registered in Scotland are

required to be of minimum legal age (16).

C.Directors� duties and liabilities

The powers and duties of directors are outlined in the company�s Articles of Association. In short, directors must:

�� act in the best interest of the company and its shareholders�� not run the company for fraudulent purposes�� not let the company continue to trade when insolvent�� be honest with shareholders�� avoid placing themselves in a position where there is the possibility of a conflict between their personal interest and their duty to the company

In addition to the responsibilities that directors have towards their shareholders and the company, a company�s directors are also legally responsible

and personally liable for the timely filing of certain documents at Companies House. These include, but are not limited to:

�� Annual accounts�� Annual returns�� Notice of change of directors or secretaries or their particulars

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�� Notice of change of registered office address�� Copies of resolutions�� Allotments of shares

If these documents are not filed correctly on time, directors can be liable for not just a fine but also, although rare, criminal prosecution.

D.About secretaries

A secretary is the second officer legally required by a company. Most companies have only one secretary, however it is possible, but usually

unnecessary, for a company to have joint secretaries.

E.Can anyone be a secretary?

Anyone can be a secretary, except, in the case of companies with a sole director, the person acting as the sole director cannot also be the secretary.

F.What are the duties of a secretary?

Although it is a legal requirement for a company to have a secretary, unlike the director of a company, there are no legal duties defined by the

Companies Act that the secretary has to perform, nor does the Act give the secretary any powers or special rights. Instead, the duties of the secretary

are usually defined on their contract with the company. Common duties include:

�� Circulating notices of meetings to directors, shareholders and, if applicable, auditors�� Attending board and general meetings to record the minutes�� Maintaining the company�s statutory books, including:

� the register of members

� the register of directors and secretaries

� the register of directors� interests

� the register of charges�� Ensuring that statutory forms are filed promptly at Companies House�� Sending copies of resolutions and agreements to Companies House�� Ensuring that people entitled to do so can inspect company records

G.Secretary�s liabilities

As the secretary is considered a legal officer of the company, he or she can be considered criminally liable for defaults committed by the company, such

as the failure of the company to deliver its accounts on time.

H.About the Chairman

It is usual for the directors to appoint a Chairman who will preside over meetings. A Chairman is usually a non-executive director employed specifically

for that purpose, although the existing board can appoint one of their own number to act as Chairman. Note that a Chairman can not just be anyone�

he must be a registered director of the company. Providing the Articles of Association of the company allow (as the Articles in this book do), the

Chairman can use a casting vote which is a special vote used to break ties should they arise during the course of a meeting.

Chapter 4 | Officers

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Shares andshare capital

5.

A. What is share capital?

B. What is authorised share capital?

C. What is issued share capital?

D. What are shares for?

E. Authorised vs issued share capital

F. The subscriber shares

G. Share certificates

H. Can more shares be issued in the future?

I. Pre-emption rights

J. Are shares the only way of getting money intothe company?

Chapter 5 | Share Capital

u 5. Share Capital

A.What is share capital?

A limited company has shareholders who each own a stake, or share, in the company. There must be a minimum of one shareholder in a limited

company. Shareholders get a share of the company�s profits in the form of dividends, and they can also vote for and against the passing of resolutions.

A company�s Memorandum of Association will state

�� the amount of share capital the company will have; and�� the division of the share capital into shares of a fixed amount

For example, a company could have a share capital of £1000, made up of 2000 shares at 50p each.

B.What is authorised share capital?

The authorised share capital is the share capital mentioned in the company�s Memorandum of Association. In the above example, the authorised share

capital would be £1000 made up of 2000 shares at 50p each. It is the maximum amount of shares, and the nominal value of those shares, decided by you

in the Memorandum of Association on the company�s incorporation, that can be issued by the company.

C.What is issued share capital?

Issued share capital is the portion of the authorised share capital which has been issued to shareholders. Taking the above example, the company could

have issued 300 of its 2000 shares. Therefore, with shares at 50 pence each, the issued share capital would be £150.

D.What are shares for?

Shares are one way of getting money into the company, and they also determine who has control of the company and the percentage of the profits

received. To keep control of your company you should own more than 50% of its shares.

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E.Issued vs authorised share capital

It is a common mistake for people to believe that if, for example, they take one share in a company with an authorised share capital of £100 made up

of 100 shares of £1 each, then it is logical to assume that they own 1% of the company (one share out of 100 shares is 1%). However, it is the percentage

of issued share capital which you own that matters, not the percentage of authorised share capital. For example, in a company with an authorised share

capital of one millions pounds made up of 1 million shares of £1 each, if that company has only ever allotted one share to one shareholder, then that

shareholder would own 100% of the company and have full control.

F.The subscriber shares

When a company is incorporated, it must have at least one shareholder. The founding shareholders, along with the number of shares they have agreed

to take, is stated in the Memorandum of Association. They are known as the subscribers. After incorporation, the subscribers are allotted their

respective shares using form 88(2). Upon payment, they are then issued a share certificate and their details are entered in the company�s Register of

Members.

G.Share certificates

Whenever shares are issued to a shareholder, you must issue a share certificate to the shareholder who purchased the shares. It must:

�� be signed by a director and the company secretary or be sealed with the company seal�� state a unique certificate number�� state the name of the company�� state the name and address of the shareholder�� state the percentage to which the shares are paid up (or fully paid if they have been paid for in full)�� state the number of the shares they have taken in words and figures�� state the nominal value and class of the shares

Share certificates should be kept safely by their respective shareholders. Should a shareholder lose a share certificate, or should it become defaced

or worn, the company is obligated to replace it, although it may charge the shareholder for any expenses incurred in providing a new certificate. An

example of a share certificate can be found in Appendix C

H.Can more shares be issued in the future?

The process of allowing more shareholders into the fray is a strict one. This is to safeguard the interests of the company�s existing shareholders�

any new shareholders pose a threat to the ownership and control of a company. It is the job of the directors to allot shares, but before they can allot

shares they must first be given the �permission� to do so by the company�s existing shareholders. This permission, or �authority� will either be stated

in the company�s Articles of Association on its incorporation, or it can be given by shareholders passing the appropriate resolution at a general

meeting of the company. Paragraph 7 of the Articles of Association included with this book give the directors the authority to allot shares up to an

amount which can be customised by you, for a period up to five years starting from the date of incorporation.

I.Pre-emption rights

In most companies� Articles of Association, there is a clause which gives existing shareholders of the company pre-emption rights. Pre-emption rights

are the rights of existing shareholders to be offered new shares on beneficial terms by the company. In the Articles of Association provided by this

book, you will find paragraphs 8 and 9 provide the rules governing pre-emption rights. In more simplistic terms, they state that existing shareholders

of the company must be offered first refusal of new shares which are to be issued (or existing shares to be transferred from another shareholder),

in direct proportion to their present shareholding to prevent the possibility of an �outsider� gaining a controlling interest. For example, if a company

has two shareholders, one who owns 30 shares, and another who owns 70 shares, and it is decided that 200 new shares are to be allotted, then the

first shareholder would be offered the chance to buy 60 of those shares, and the second shareholder would be offered 140 of those shares, before

the shares were offered for sale to anyone outside the company.

J.Are shares the only way of getting money into the company?

No. You can put money into the company and write it down as a loan from the director (or an �individual� if you are not the director).

Chapter 5 | Share Capital

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A. What are resolutions?

B. How are resolutions passed?

C. When do resolutions need to be used?

D. Types of resolution

E. Procedure for passing resolutions

F. Flow chart of procedure for passing resolutions

G. Procedure for conducting board meetings

H. Procedure for conducting general meetings

I. A fictional example

Resolutions andmeetings

6.

u 6. Resolutions and meetings

A. What are resolutions?

Decisions on the running of a company are made by passing resolutions. Think of the phrase, �New Year�s Resolution�: someone may make a New Year�s

Resolution to give up smoking; likewise, the shareholders or directors of a company may make a resolution to, say, change the company�s name. If a

majority of the directors or shareholders agree, then the resolution is passed. Unlike a New Year�s Resolution however, a company resolution cannot

be broken�instead, another resolution would need to be passed to revoke the original resolution.

B. How are resolutions passed?

Resolutions can be passed at a meeting between either the directors or the shareholders of the company, depending upon the authority required topass the resolution in question. For example, appointing or removing a secretary is a simple matter which can be decided upon by the directors.However, more complex matters, such as increasing the share capital of the company, will require the approval of shareholders too. Two types ofmeeting can be held:

�� Board meeting. This is a meeting between the directors. It is known as a board meeting as board is a term used to describe the company�scollective directors.

�� General meeting. Any meeting between the shareholders of a company is known as a general meeting. There are two types of general meeting:

the annual general meeting which is an obligatory meeting between shareholders held once a year, and an extraordinary general meeting which isthe term used to describe any meeting between shareholders which is not the annual general meeting (hence the use of the word extraordinary�if the meeting between shareholders is not the usual annual general meeting, then it is �out of the ordinary� or �extraordinary�).

Resolutions can also be passed in writing without the need for a meeting. They are known as written resolutions, and can be used to pass any resolutionthat could have been passed in a board or general meeting. In order for such a resolution to be passed, it must be signed by all the shareholders or

directors of the company.

C. When do resolutions need to be used?

Resolutions are usually only used for making decisions of an important or statutory nature. For example, decisions involving the company�s share

capital, the sale of its shares, alterations to its Memorandum and Articles of Association, the appointment or removal of officers and other official

matters.

Chapter 6 | Resolutions and meetings

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D. Types of resolution

The most common types of resolution are listed in the table below.


6Type of resolution

Directors� resolutions (alsoknown as board resolutions)44444

These are only used by directors at board meetings. Thedirectors of a company are collectively known as the board,hence the name: board meeting.

Ordinary resolutions44444

These are used for all matters unless the Companies Actor the company�s Articles of Association require anothertype of resolution. They are passed by a simple majorityapproval (more than 50%) of shareholders who are enti-tled to vote at a meeting

Extraordinary resolutions44444These are used for certain matters which require a share-holder majority of at least 75% to be passed.

Special resolutions44444

Like extraordinary resolutions, these resolutions alsorequire a shareholder majority of at least 75% to bepassed. They are used for important matters, such as al-terations to the Memorandum or Articles of Association,or a change of company name.

Written resolutions44444

As explained earlier, all the above resolutions can bepassed in written form, as an alternative to holding ameeting. To pass a written resolution, a meeting is notrequired and no prior notice is necessary. But the resolu-tion can only be passed by unanimous agreement of allthe members who, at the date of the resolution, wouldbe entitled to attend and vote at a meeting that wouldotherwise have been held to pass it.

Elective resolutions are used for five specific purposesonly, and can only be passed by unanimous agreement of allthe company�s shareholders. The purposes are:

� To amend the authority of the directors to allotshares (see Chapter 5H)

� To dispense with the requirement to hold annualgeneral meetings

� To dispense with the need to lay accounts beforeshareholders

� to allow the majority of shareholders required toauthorise short notice of a meeting and notice ofa resolution to be reduced from 95% to a lowerfigure but not less than 90%

� to dispense with the requirement to re-elect audi-tors (if the company has auditors) every year

Elective resolutions44444

6When it is used

E.Procedure for passing resolutions

The first step is deciding whether a resolution needs to be passed. As already explained, resolutions are primarily required for issues of a

statutory nature�for example, increasing the company�s authorised share capital or changing its name�or where a decision needs to be made

that could have a great impact upon the company�such as the approval of an important contract. If a resolution is required, does it need the

approval of:�� the directors;�� the shareholders;�� or both?

1

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Do-It-Yourself

If a resolution requires the authority of the shareholders it is common for it to first be approved by the directors in the form of a board

resolution containing a proposal. This is known as a motion. For example, if the directors decide that the company should increase its

authorised share capital, they cannot pass a resolution to this effect as they do not have the authority, so instead they will pass a board

resolution, resolving �to convene an extraordinary general meeting to propose that the authorised share capital be increased�. The

motion will then be put to the shareholders at an extraordinary general meeting. If the necessary majority is not obtained, the motion fails.

If the resolution requires the approval of the directors, consider the following points:�� Does a board meeting (meeting of the directors) need to be held to discuss the matter?�� Or do the directors unanimously agree on the matter? If they do, it may be more convenient for a written board resolution to be

signed, doing away with the need for a meeting.

If the resolution requires the approval of the shareholders, then the following issues will need to be considered:�� Does the matter require a special resolution, ordinary resolution or other type of resolution to be passed?�� Does an extraordinary general meeting need to be held to discuss the matter? Or do the shareholders unanimously agree? If they

do, then the meeting can be dispensed with and a written shareholders resolution signed instead.

2

3

4


A decision needsto be made

Does it requirethe approval of

directors?

Does it also requirethe approval ofshareholders?

Will the directorsagree unanimouslywithout a meeting?

Pass a written boardresolution

6

6

6

6

Will all the sharehold-ers agree unanimously

without a meeting?

6

6

3

3

Pass a writtenshareholders resolution

Hold an extraordinarygeneral meeting todiscuss the matter.

Hold a board meetingto discuss the matter

YES

YES

YES

YES

NO

NO

6

F.Flow chart of procedure for passing resolutions

3Use day-to-day

executive powersNO

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Do-It-Yourself

H. Procedure for conducting general meetings (meetings of the shareholders)

Give notice. The Articles of Association state that reasonable notice must be given to directors for a board meeting. However, they do not

specifically quote a fixed time period as is the case for notices of shareholders meetings. The time period should be decided appropriately

according to the circumstances�an emergency meeting for example, could be convened immediately. Notices for board meetings do not have

to be given in writing

Ensure a quorum is present. Directors, like shareholders, act collectively. Therefore, there must be a minimum number of directors present

at a meeting before it can begin. This number is known as a quorum. The required quorum is stated in a company�s Articles of Association.

Paragraph 14 of the Articles of Association provided by this book state that the quorum for directors must be two, except in the case of

companies with only one director, in which case the quorum is one. When a quorum is present at a meeting, it is considered to be quorate, and

proceedings can begin.

Discussion and voting. Each director has one vote, and board resolutions are passed by a majority (more than 50%) of the directors agreeing.

In the event of there being a tie�for example, four directors, two opposing the resolution and two approving the resolution�the chairman

of the meeting can use a casting vote to prevent an impasse (a casting vote is a vote used to break a tie).

Recording of minutes. At the end of a board meeting, minutes must be prepared, signed by the chairman and filed in the company�s minute

book

Filing of resolutions. Certain resolutions must be filed at Companies House.

1

2

3

4

5

Give notice. The amount of notice given to shareholders of a general meeting is dependant upon the type of meeting to be held, and the

resolutions proposed to be passed. To determine the amount of notice to give, you will need to consult the table below.

6Type of meeting

Extraordinary General Meeting (EGM)44444

Annual General Meeting (AGM)44444

Any meeting proposing to pass a special resolution44444

21 clear days

Any meeting where a director is tobe removed44444

Must leave formal written notice atregistered office at least 28 days beforemeeting

6Amount of notice required

14 clear days

21 clear days

Any meeting where a director is tobe appointed44444

21 clear days

1


G. Procedure for conducting board meetings (meetings of the directors)

Meetings can also be called on short notice, as long as a majority of the shareholders agree by signing a form of consent. The required majority

for a meeting to be called on short notice is as follows:

Ensure a quorum is present. As is the case with board meetings, shareholders� meetings also require a quorum to be present. Paragraph 4

of the Articles of Association provided by this book state that the quorum for shareholders must be two, except in the case of companies with

only one shareholder, in which case the quorum is one.

Discussion and Voting. Shareholders vote on matters using two methods:�� by a show of hands. This is the usual way in which shareholder votes are counted. Each shareholder at the meeting has a single vote,

and approval or disapproval is expressed by the raising of hands.�� by a poll. A poll counts votes according to the percentage of shares held by each shareholder rather than by the number of shareholders

present at the meeting. A poll can be ordered by the chairman of the meeting, or, if it is demanded, by at least five shareholders, or

shareholder(s) holding a minimum of 10% of the company�s shares. The results of a poll overrule the results of a show of hands.

6Type of meeting

Annual general meeting (AGM)44444

Extraordinary general meeting (EGM)44444

6Majority required to consent to short notice

Requires unanimous agreement of allthe shareholders

Requires a majority approval ofshareholders holding at least 95% ofall the shares (can be lowered to 90% bypassing the required elective resolution)

2

3

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Do-It-YourselfChapter 6 | Resolutions and meetings

Board meeting convened. The directors hold a board meeting. They unanimously agree that the authorised share capital of the company

should be increased, and pass a board resolution to that effect. Minutes of the board meeting and a copy of the board resolution are recorded

by the secretary.

Notice of extraordinary general meeting. The secretary prepares a notice which contains details of the extraordinary general meeting

and the motion to increase the authorised share capital of the company. It is sent out to all the company�s shareholders.

Extraordinary general meeting held. The extraordinary general meeting is held, and the company�s four shareholders cast their votes by

a show of hands.�� two of the shareholders vote for the proposed resolution, and two of the shareholders vote against the resolution�� the Chairman then calls for the votes to be counted on a poll�� the two shareholders who approved the proposed resolution hold a majority of shares greater than the two shareholders who

opposed the resolution, therefore, the Chairman declares that the resolution is passed�� the secretary records the minutes of the meeting, and prepares a copy of the passed resolution, signed by the Chairman, for filing in

the company�s minute book and at Companies House. The Memorandum of Association is altered and reprinted to show the new

amount of the company�s authorised share capital.

1

Recording of minutes. As for board meetings.

Filing of minutes. As for board meetings.

4

5

I. A fictional example

A company decides that it wants to increase its authorised share capital from £1000 made up of 100 shares of £1 each to £50,000 shares made up of 50,000

shares of £1 each. The procedure would be as follows:

2

3

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Do-It-Yourself

About theMemorandum andArticles of Association

7.

A. What is the Memorandum of Association?

B. How do I write a Memorandum of Association?

C. Customising the Memorandum of Association

D. What are the Articles of Association?

E. How do I write the Articles of Association?

Chapter 7 | About the Memorandum & Articles of Association

u 7. About the Memorandum & Articles of Association

A.What is the Memorandum of Association?

The Memorandum of Association is one of two legal documents required to form a limited company. It is also the simplest. The Memorandum of

Association contains the following details:

�� the company�s name�� where the Registered Office of the company is situated (in England, Wales or Scotland)�� a statement of the limited liability of the shareholders�� a statement of the company�s authorised share capital (for more information, see Chapter 5)�� a signature of one or more subscribers (the company�s first shareholders)�� what it will do (its objects). Rather than tailoring the objects of each Memorandum of Association to each individual company, most formation

agents have now settled on a format that covers everything by stating the company�s objects as �carrying on business as a general commercial

company�. This is the format we will use in the templates of our Memorandum of Association as it means your company can carry out any

business it wants to without being specific.

B.How do I write a Memorandum of Association?

This book contains a template Memorandum of Association in Appendix A. Simply rewrite this template, replacing the numbered text in blue with

your own details (we�ll go through each change in a minute). You can easily produce your own Memorandum of Association using a word processor

and a printer. Just make sure the text is all printed in black, and the type is large and clear enough to be read, otherwise Companies House may reject

your documents for being considered illegible.

C.Customising the Memorandum of Association

Both these references must be changed to your own company�s name

This paragraph concerns the situation of your company�s Registered Office. This should state:

�� The Registered Office of the Company will be situated in England and Wales; or�� The Registered Office of the Company will be situated in Scotland

depending upon where your company�s Registered Office is to be located.

1

2

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Do-It-Yourself

This is a statement of your company�s Authorised Share Capital. You should change it to the amount of Authorised Share Capital you want

to allocate to your own company. More information on share capital can be found in Chapter 5

This paragraph concerns the subscribers of the company. The subscribers are the people who agree to take (or subscribe to) the first shares

in the company. They become the company�s first shareholders. The name and address of each subscriber, and the number of shares taken

by each subscriber must all be stated here, and each subscriber must sign in the presence of a witness.

Finally, the person who witnessed the signatures of the subscribers must also sign.

D.What are the Articles of Association?

The Articles of Association is the second legal document required to incorporate a limited company along with the Memorandum of Association. It is a

set of rules and regulations which govern the company, its officers and its shareholders. Most limited companies adopt a legal table commonly referred

to as Table A as their Articles of Associations. Table A is split into a lengthy series of numbered paragraphs, which each fall under various headings such

as PROCEEDINGS OF DIRECTORS and POWERS OF DIRECTORS. Sometimes, there are certain rules contained in Table A that a company may not want to adopt,

and so the company�s Articles of Association will generally contain a statement such as this:

�Regulations 60, 61, 64, 73, 74, 75, 81(e), 89, 94, 95, 96, 97 and 98 of Table A shall not apply to the Company, but the Articles hereinafter contained together with the

remaining regulations of Table A, subject to the modifications hereinafter expressed, shall constitute the regulations of the Company.�

Basically, this means the company has adopted Table A as its Articles of Associations, with the exception of the respective paragraph numbers

mentioned, and has rewritten those paragraphs or simply omitted them to suit its own purposes.

Although the Articles of Association may seem like an unwieldy literary version of spaghetti junction at a first glance, after you�ve learned the jargon

contained in our glossary and combined with a little patience, you should soon be able to understand it.

Understanding it is relatively important, as it contains certain procedures that must be strictly followed: for example, regulations governing the

passing of resolutions or conduction of meetings.

E.How do I write the Articles of Association?

Being the kind-hearted souls that we are, we have written a template Articles of Association for you.

You need to do the following to complete the Articles of Association:

This must be changed to the amount of shares you wish to give the directors authority to allot or grant options over. If you are unsure of

what this should be, simply replace it with the amount of your company�s authorised share capital. This will then give the directors a five-

year window during which they will be able to allot shares up to the value of your company�s authorised share capital. For more

information, read Chapter 5

The Articles of Association needs to be signed by the subscribers in the presence of a witness, who must also sign.

You will also find that Appendix G contains a copy of Table A for your convenience. Referring to this, along with your Articles of Association, will

guide you through all the procedures required to run your company.

3

4

Chapter 7 | About the Memorandum of Association

5

1

2

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Do-It-Yourself

8.Afterincorporation

A. The first board meeting

B. Record keeping

C. Inland Revenue

Chapter 8 | After incorporation

u 8. After incorporation

A.The first board meeting

Once the certificate of incorporation has been received from Companies House, the company should hold its first board meeting (a meeting of the

company�s directors). Some common matters dealt with at the first board meeting of companies include:

�� Share allotments. The subscribers to the Memorandum of Association will need to be allotted the shares they agreed to take on incorpora-

tion. This is done by completing form 88(2), issuing the relevant share certificates and entering the details of each subscriber in the Register of

Members.�� Appointing auditors. Companies with a certain turnover and balance sheet value are required to appoint auditors. If this is the case, the

directors should pass a board resolution appointing an auditor. For more information see Chapter 12�� Opening a bank account. A board resolution must be passed to approve the opening of a bank account.�� VAT registration. If a company�s turnover is more than the VAT threshold (set at £54,000 for the year 2001/2002) then it is legally obliged to

register with Customs and Excise for VAT. If a company�s turnover is below the threshold, then whether or not it registers for VAT is a decision

that should be considered and made by the directors. The registration of VAT should be approved by a board resolution. More information on

VAT is in the next chapter.�� Appointing the Chairman. The Chairman presides over board and general meetings. He must be a director of the company. It is not obligatory

for a company to have a Chairman�smaller companies may find it unnecessary, but as a company grows, it may benefit from the appointment of

a Chairman. A board resolution must be written should the directors agree on the appointment of a Chairman.

We have provided example minutes of a first board meeting in Appendix D.

B.Record keeping

It is a legal requirement for companies to maintain statutory books. The statutory books must be kept at the company�s Registered Office and they must

consist of:

�� The Register of Members. This lists the details of all the current and past shareholders (members) of the company, including their names,

addresses and comprehensive information on their shareholdings�� The Register of Directors. This lists the details of all the directors of the company�� The Register of Secretaries. This lists the details of all the secretaries of the company�� The Register of Directors� Interest. This is a list of all the interests of the directors. Interests means any shares or debentures they hold�� The Register of Charges. This is one of the least commonly used registers�it is used to record any charges against a company�s property

As well as the statutory books, companies must also keep a minute book which is a file of all the minutes recorded at board and general meetings

convened by the company. Copies of all resolutions passed by the company must also be kept. Examples of registers can be found in Appendix C.

C.Inland Revenue

Companies House usually pass the details of any new companies onto the Inland Revenue, who will then send you a New Company Enquiry Form which

will request certain information about your company. If you do not receive this, you should contact the Inland Revenue yourself.

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Do-It-Yourself

Companies are liable for corporation tax which is a tax on the company�s profits. The Inland Revenue will send out a corporation tax self-assessment

form which must be completed every year to assess a company�s liability for corporation tax. Companies which are dormant, or have no turnover, are

outside the scope of corporation tax and will not be liable.

Companies are also responsible for operating PAYE (Pay As You Earn), which is a scheme which deducts National Insurance and Income Tax from

employees� wages/salaries and directors� remuneration. The Inland Revenue will provide detailed guides and information on PAYE by sending you an

Employers Starter Pack at your request. It is extremely important that you determine your liability for operating PAYE and National Insurance against

payments to employees� and directors.

Chapter 8 | After incorporation

24


Do-It-Yourself

9.Wages andPayroll

A. How do I take money out of the company?

B. Salaries and wages

C. National Insurance

D. Income tax

E. The most efficient way to pay yourself

Chapter 9 | Wages and Payroll

u 9. Wages and Payroll

A.How do I take money out of the company?

There are many different ways of taking money out of your company. The first, and most important, thing to remember is you cannot just withdraw money

as and when you feel like it. The company is a seperate legal entity from you, and technically, its money isn�t yours, so you can�t just withdraw it without

accounting for it. Every pound of money that is taken out, or put into, the company account has to be accounted for. There are three most commonly

used ways of taking money out of a limited company:�� As a salary or a wage. If you take money out of the company as a salary or a wage, depending upon the amount of money you pay yourself,

you will be required to deduct income tax and National Insurance from that amount. This is the way that all employees of companies are paid.�� As a dividend. If the company makes a profit, and you are a shareholder of the company, you can pay yourself a dividend after corporation tax

has been deducted. The advantage of paying a dividend is that you do not pay any National Insurance on dividends, and if your total annual

income is low enough, no income tax will be due on dividends either. Dividends can only be paid if the company makes a profit.�� As a partial repayment of a loan. Let�s imagine that to start your company, you bought two shares of £1 each, and then loaned the company

£10,000. The company can�t repay you the £2 that you paid for the shares, but it can repay you the £10,000 you loaned it. It doesn�t matter how

it is paid back to you�in one lump sum, or in several different-sized amounts spread over a long period of time. But the advantage is that you

can withdraw money at any time and write it down as the company repaying you a portion of the money you loaned it, and no income tax or

National Insurance contributions will be due. However, once the company has repaid you the full amount of the loan, you will have to take

money out in one of the two ways detailed above.

B.Salaries and wages

Unlike sole traders who are considered self-employed, directors of a limited company are considered employees of the company. The distinction is

important, because if you are self-employed you are taxed differently to someone who is an employee. The main differences are as follows:�� Self-employed. Self-employed people pay flat rate National Insurance contributions known as �Class 2� which are currently £2 per week,

regardless of income, and �Class 4� contributions at the end of the year, which for 2001/2002 are set at 7% on net profits. As well as paying

Class 4 National Insurance on this end-of-year profit, they also pay income tax on it too, under the Self-Assessment scheme.�� Employees of limited companies. Limited companies have to operate a scheme known as Pay As You Earn (PAYE), against all payments such

as wages and salaries to their employees, including directors. Under PAYE, National Insurance contributions and income tax are calculated and

deducted every time a payment is made, and are then collected by the Inland Revenue, usually on a quarterly basis. Various official procedures

have to be followed when a new employee is taken on, or an existing employee leaves.

C.National Insurance

The basics of National Insurance are:�� Employees of a company, including directors, pay what are known as �Class 1� National Insurance contributions.�� The exact amount they pay is calculated according to their salary or wage.�� Both the employer (in our case, the limited company), and the employee have to contribute a share of National Insurance�� If you earn under the earnings threshold (which for 2001/2002 is set at £4,535 a year), then no National Insurance will be due.

25


Do-It-YourselfChapter 9 | Wages and Payroll

�� However, as soon as you creep past the earnings threshold, you and your employer (i.e. the company) will have to start paying National

Insurance on all earnings above the threshold (i.e. earnings above £4,535)�� Finally, once earnings surpass the upper earnings limit the employee stops contributing his/her share of National Insurance, but the employer�s

contribution continues infinitely

For example:�� If you take a salary of £4,000, no National Insurance contributions will be due, as it is below the 2001/2002 earnings threshold of £4,535; but�� if you take a salary of £10,000, you will pay your share of National Insurance contributions on the £5,465 earnings above the threshold

(£10,000 minus £4,535).10% of £5,465 means that £546.50 will be due in employee contributions.�� The company (as it is the �employer�) pays 11.9% of the £5,465-worth of earnings above the threshold, so £650.34 of employer�s contribu-

tions are due.�� The total NI paid is therefore £1,196.84. A quicker way of working out the total amount due is to add the percentages together(10% and

11.9%), making 21.9%, and working out 21.9% of your earnings above the earnings threshold.

D.Income Tax

Everyone who receives an annual income pays income tax. For most, this income is derived from the wages or salary they earn from their main job.

The key points about income tax are:�� Everyone is entitled to earn a certain amount of money before they start paying income tax.�� this is known as an allowance�� Each person has an allowance based on their individual circumstances�for example, there are different allowances for married couples,

people with children or people registered as blind.�� For the tax year 2001/2002, most people have a basic personal allowance of £4535 a year. This means they can earn up to £4535 a year without

paying any income tax. All income earned above your allowance is taxed at the appropriate income tax rate.�� Each person is given a unique tax code by the Inland Revenue made up from numbers and letters according to the allowances they claim. For

example, the tax code for people who claim a basic personal allowance is 453L (the L is the letter used to designate a basic personal allowance,

the 453 is taken from the basic personal allowance of £4535 per year).

For example:�� If you take a salary of £10,000, and your tax code is 453L (basic personal allowance) you will receive the first £4535 of your earnings tax-free.�� the next £1,880 is taxed at the starting rate of 10%, so income tax of £188 will be due�� this leaves £3,585 (£10,000 - £4535 - £1880) to be taxed at the basic rate of 22%, resulting in income tax of £788.70�� Total income tax on a salary of £10,000 is therefore £976.70

E.The most efficient way to pay yourself

If, as is the case with most small limited companies, you are a director who is also a shareholder, the most efficient way to take money out of the

company is:�� to pay yourself a salary that doesn�t cross the earnings threshold for National Insurance contributions. For the tax year 2001/2002 this would

be £4535: as it is below the earnings threshold, no National Insurance or income tax is due.

6Earnings

Below £4,535 per year

Between £4,535.01 and £29,900 per year

Above £29,900 per year

6Employee�s NI Contribution

None due

10% of earnings above ET

No further contributions due

None due

11.9% of earnings above ET

11.9% of earnings above ET

Figure 9.1 Current rates of National Insurance

6Taxable bands 2001/2002

Starting rate 10%

Basic rate 22%

Higher rate 40%

6Earnings above allowance (£)

0 - 1,880 above allowance

1,881 - 29,400 above allowance

Over 29,400 above allowance

Figure 9.2 Current rates of income tax

6Employer�s NI Contribution

26


Do-It-YourselfChapter 9 | Wages and Payroll

�� To take the rest of the money as dividends. Providing your total annual income does not enter the higher rate bracket for income tax, you will

not pay any tax on the dividends�� Therefore, the only tax that will be paid is corporation tax, on the company�s profits

To illustrate how this method of withdrawing money is more effective, let�s take the example of a company with £15,000 profits. If you were to take

the whole £15,000 as salary, and you claim the basic personal allowance, the result would be as follows:�� the first £4535 of your salary is tax-free.�� the next £1,880 is taxed at the starting rate of 10%, so income tax of £188 will be due�� this leaves £8,585 (£15,000 - £4,535 - £1,880) to be taxed at the basic rate of 22%, resulting in income tax of £1,888.70�� total income tax on a salary of £15,000 is therefore £2,076.70; plus�� combined employer�s and employee�s National Insurance contributions come to a total of £2291.84 (21.9% of £10,465)�� total money paid in National Insurance and income tax for the year is £4368.54

However, if you were to use the method of taking a combination of dividends and salary, the tax saving would be big:�� tax-free salary of £4,535 is paid, leaving £10,465 of profits in the company (£15,000 - £4,535)�� corporation tax is paid on the first £10,000 of profits at 10%, making £1,000, whilst the remaining £465 of profits are taxed at the marginal relief

rate of 22.5%, making £104.63�� total corporation tax paid is £1,104.63, leaving a net profit of £9,360.37�� this can be taken as a dividend, and no more tax will be due, so a massive £3263.91 has been saved in tax

To illustrate how being a limited company is much more cost-effective than being a sole trader, we�ll use the same example. In the case of a sole trader,

the £15,000 would be considered net profit:�� the first £4,535 is tax free, leaving £10,465 of profits in the company (£15,000 - £4,535)�� the next £1,880 is taxed at the starting rate of 10%, so income tax of £188 will be due�� this leaves £8,585 (£15,000 - £4,535 - £1,880) to be taxed at the basic rate of 22%, resulting in income tax of £1,888.70�� total income tax paid is £1,888.70 + £188 = £2,076.70�� Class 2 National Insurance contributions are paid every week during the year at £2, making £104 (52 weeks x £2)�� Class 4 National Insurance contributions are paid at the end of the year at 7% on net profits, which are £15,000, so the total amount of Class

4 contributions due is £1,050�� Total National Insurance paid is £1,050 + £104 which is £1,154�� altogether, a total of £3,230.70 would have been paid in income tax and National Insurance contributions

27


Do-It-Yourself

10.VATA. What is VAT?

B. Do I have to register for VAT?

C. Rates of VAT

D. How is VAT calculated?

E. When and how is VAT paid?

Chapter 10 | VAT

u 10. VAT

A.What is VAT?

VAT stands for value added tax. It is a tax levied on goods and services supplied to consumers. Most of us pay VAT every day�on the computers we buy,

or on food we eat in restaurants.

B.Do I have to register for VAT?

All businesses, including limited companies, are legally obliged to register with Customs and Excise for VAT if their taxable turnover in the past twelve

months or less is more than the current VAT threshold, or there are reasonable grounds to believe that it will exceed the threshold within the next

30 days. Taxable turnover means income derived by the company from supplying taxable goods or services. VAT thresholds for recent years are as

follows:

If a company only supplies goods and services which are exempt from tax, then it will not be required to register. If your company�s taxable turnover

is below £54,000 then you do not need to register for VAT, but you may do so voluntarily. For example:�� In July 2001, XYZ Limited�s taxable turnover for the past 12 months is only £53,000. It is therefore not eligible for VAT�� In August 2001, XYZ Limited�s taxable turnover for the past 12 months is now £55,000. It has passed the threshold, and must now register for

VAT.

It is therefore quite important to calculate your turnover on a monthly basis for the past twelve months if it is hovering near the VAT threshold.

C.Rates of VAT

Different rates of VAT apply to different goods and services, and some goods are completely exempt from VAT:�� 0% (zero-rated supplies). Applies to most food (but not meals in restaurants and cafes or hot take-away food and drink), books,

newspapers, most young children�s clothing, sales of new houses and exports�� 5% (reduced rate supplies). Applies to the installation of certain energy saving materials and to fuel and power used in the home and by

charities�� 17.5% (reduced rate supplies). Applies to most other goods and services

It is important to remember the following:�� Zero-rated goods and services are not the same as exempt goods and services. If your turnover from goods and services rated at 0% exceeds

£54,000, you are still legally obliged to register for VAT even though you have none to pay. If this is the case, you can write to Customs and

Excise and ask to be exempt from the requirement to register.

D.How is VAT calculated?

The appropriate rate of VAT is added to the price of any goods or services supplied by a business or company registered for VAT. For example, if TUV

Limited sells televisions at £300, it must add 17.5% of VAT onto the price of each television. The televisions will therefore be sold for £352.50. The

£52.50 must be paid to Customs and Excise, the other £300 is kept by the company. VAT collected by companies on the sale of taxable goods and

services to their customers is known as output tax.

6Year 6Threshold (£)

April 1998 � March 1999 50,000April 1999 � March 2000 51,000

April 2000 � March 2001 52,000April 2001 � March 2002 54,000

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Do-It-Yourself

Companies also pay VAT on goods and services they purchase. For example, a company would pay VAT on any computer equipment it purchases. This

is known as input tax.

Input tax (VAT paid by the company) is deducted from output tax (VAT received by the company) to reach the amount of VAT a company needs to surrender

to the VAT office.

For example:�� During a VAT accounting period (usually a quarter of a year), WXYZ Limited sells £5,000 worth of goods taxable at the standard VAT rate of 17.5%.

Its output tax (VAT received from its customers), is therefore £875.�� During the same accounting period, it cost WXYZ Limited £1,500 to purchase the goods from its supplier, and the VAT it paid on this purchase

was £262.50.�� WXYZ Limited also spent £500 on advertising. The VAT it paid on this was £87.50�� Its input tax (VAT it paid on purchases), is therefore £350�� XYZ Limited therefore owes £525 in VAT to Customs and Excise (£875 output tax - £350 input tax = amount of VAT payable).

If your input tax is more than your output tax, you will be entitled to a refund of the balance from Customs & Excise.

E.When and how is VAT paid?

VAT is usually paid on a quarterly basis, starting from the date a business registers for VAT. A VAT return must be filled in every quarter, calculating the

amount of VAT due. This can now be done electronically via the web, but the usual method is on a simple printed A4 form, known as VAT 100, an example

of which is shown overleaf in figure 10.1.

Chapter 10 | VAT

29


Do-It-Yourself

HM Customsand Excise

Value Added Tax ReturnFor the period

to

Your VAT Office telephone number is

9 780007 117512

00999>ISBN 0-00-711751-5

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For official use VAT due in this period on sales and other outputs 1

VAT due in this period on acquisitions from otherEC Member States

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Total VAT due (the sum of boxes 1 and 2) 3

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You could be liable to a financial penaltyif your completed return and all the VATpayable are not received by the due date.

Due date:

Forofficial

use

Fig

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10.

1 Fo

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Chapter 10 | VAT

30


Do-It-Yourself

11.Corporation TaxA. What is corporation tax?

B. Rates of corporation tax

C. Calculating corporation tax

D. Capital allowances

E. Corporation tax self-assessment

F. When is corporation tax due?

G. What if I make a loss?

u 11. Corporation Tax

A.What is corporation tax?

Limited companies pay corporation tax every year on the total of their trading profits (profits made from the sale of their goods and services afterdeducting allowable expenses), capital gains (profits made from selling their assets for more than they purchased them for) and on all other profits

made from other sources (such as profits from investments).

B.Rates of corporation tax

The amount of corporation tax paid by a company depends upon the amount of profit it makes during the tax year. The tax year is different from thecompany�s financial year: it runs from 1st April to 31st March the following year. The rate of corporation tax for each tax year is decided upon by theChancellor of the Exchequor at the annual Budget. It is often the same for several consecutive years, and when this is the case it makes calculating

corporation tax that little bit easier. Recent rates of corporation tax are as follows:

C.Calculating corporation tax

The rate at which corporation tax is charged rises with a company�s profits. The starting rate for corporation tax is currently 10% of any profitsbetween £0-10,000. This means that if a company has profits of up to £10,000, working out corporation tax is simply a matter of finding out 10% ofthose profits. Example:

�� ABC Limited makes a profit of £9,500 for the year ending 15th June 2001. Its profits therefore fall under the £10,000 limit, so it is chargedcorporation tax at the starting rate of 10%. Ten percent of £9,500 is £950, so ABC Limited pays £950 in corporation tax.

The next rate of corporation tax is known as the small companies� rate and it is set at 20% for companies whose profit falls between £50,001 and£300,000. For example:

�� DEF Limited makes a profit of £160,000 for the year ending 31st May 2001. Its profits are therefore taxed at the small companies� rate which

is currently 20%. Its corporation tax will be 20% of £160,000 which is £32,000.

The final rate of corporation tax is the main rate. It is set at 30% and only applies to companies making more than a huge £1.5 million in profits.

By now you�ll probably have noticed we have missed out companies whose profit falls in other brackets, namely the £10,001 - £50,000 bracket andthe £300,001 - £1,500,000 bracket. That is because the maths for calculating corporation tax gets a little more complicated for these companies, as they

Chapter 11 | Corporation Tax

6Financial Year April 2000 � March 2001 (£)

Starting rate 10% 0-10,000

Marginal relief 22.5% 10,001 - 50,000

Small companies� rate 20% 50,001 - 300,000

Marginal relief 32.5% 300,001 - 1,500,000

Main rate 30% 1,500,001 or more

6Financial Year April 2001 � March 2002 (£)

Starting rate 10% 0-10,000

Marginal relief 22.5% 10,001 - 50,000

Small companies� rate 20% 50,001 - 300,000

Marginal relief 32.5% 300,001 - 1,500,000

Main rate 30% 1,500,001 or more

31


Do-It-Yourself

are eligible for something known as marginal relief. Marginal relief was introduced with the aim of easing the transition between the different rates ofcorporation tax. It basically means that companies whose profits are applicable for marginal relief end up paying less corporation tax. We�ll now takea look at two examples of how to calculate corporation tax for companies whose profits are eligible for marginal relief:

�� HIJ Limited makes a profit of £45,000 for the year ending 31st May 2001. Its profits are therefore more than the starting rate of corporationtax, but less than the small companies rate. The profit falls in-between the two bands, and so is eligible for marginal relief. It pays corporationtax on the first £10,000 of its profits at the usual corporation tax starting rate of 10%. Its next £35,000 worth of profits are taxed at themarginal relief rate of 22.5%. This works out to £1,000 and £7,875 respectively, therefore, HIJ Limited pays a total of £8,875 in corporationtax.

� LMN Limited makes a profit of £500,000 for the year ending 31st May 2001. Its profits are therefore more than the small companies rate ofcorporation tax, but less than the main rate. It pays corporation tax on the first £300,000 of its profits at the small companies rate of 20%, andits next £200,000 worth of profits are taxed at the small companies marginal relief rate of 32.5%. This works out to £60,000 and £65,000respectively, therefore, LMN Limited pays a total of £125,000 in corporation tax.

Things get even more complicated when corporation tax rates change from year to year. If a company�s accounting period straddles two tax years andeach tax year has a different corporation tax rate, then profits are divided between the two tax years on a time basis. For example:

� RST Limited makes a profit of £9,000 for the year ending 31st May 2000. The corporation tax rate for profits under £300,000 during 1999 was20% (a starting rate had yet to be introduced). However, the rate of corporation tax for companies with profits under £10,000 during 2000was 10%. Using the table over the page, we can work out that 304 days of the company�s financial year were spent in the tax year 1999, and 61days of the company�s financial year were spent in the tax year 2000.

We can then divide the profits proportionally:� 304/365 x £9,000 = £7495.89� 61/365 x £9,000 = £1504.11

(remember you will need to divide by 366 during a leap year)

You must then work out the corporation tax on the profit made in each year, using the appropriate rates:� 20% of £7495.89 = £1499.18 corporation tax due for 1999� 10% of £1504.11 = £150.41 corporation tax due for 2000

The company�s total corporation tax bill comes to £1649.59

D.Capital allowances

Imagine that you have invested £5,000 in computer equipment for your business during the course of its financial year. The purchase of computerequipment would be considered investing in an asset of your company, and consequently you couldn�t claim it as a cost in the same way you could claimstaff wages or telephone bills as a cost. Most people are aware that computer equipment loses its value very quickly, but for tax purposes it is an assetlike any other, and assets can increase in value as well as decrease. So is there any way of offsetting the cost of purchasing the computer equipment�and any other assets your company buys�against the company�s trading profit?

Yes, and it is known as capital allowance. Capital allowances allow a percentage of the cost of acquiring capital assets to be written off against the taxableprofits of a company. They are given in place of depreciation charged in the commercial accounts, which is not allowed for tax purposes.

The percentage of the cost you can claim depends upon two factors:

�� the age of the asset�� the type of asset purchased

For example, from 2 July 1998, costs incurred by small and medium sized companies through purchasing �machinery or plant� assets qualified for a firstyear allowance of 40%. This means that those companies could immediately write off 40% of the cost of purchasing those assets against their taxableprofits. For example:


April 30

May 31

June 30

July 31

August 31

September 30

October 31

November 30

December 31

January 31

February 28 (29 in a leap year)

March 31

32


Do-It-YourselfChapter 11 | Corporation Tax

�� OPQ Limited made a taxable profit of £20,000. The company spent £5,000 purchasing computer equipment to run the company. 40% of £5,000is £2,000, therefore OPQ Limited could deduct £2,000 from its taxable profits and claim it as a capital allowance, reducing its taxable profitsto £18,000. This has the effect of reducing the corporation tax due.

It doesn�t stop there: in the following and subsequent years, companies can claim 25% of the written down value of the asset. For example:

�� The next year, OPQ Limited writes down the worth of the assets even further by claiming a 25% capital allowance on their current written downvalue £3000. Twenty-five percent of £3,000 is £750, so OPQ Limited can reduce their taxable profits by £750, and the written down value oftheir assets is now only £2250. This can continue for every subsequent year until the assets worth is reduced to nothing: for example, nextyear, the assets worth would be reduced by 25% again, and this 25% would again be used to reduce the taxable profits.

Some companies can claim a 100% allowance against the purchase of certain capital assets. For example, the chancellor announced in Budget 2000 thatfirst year capital allowances at a rate of 100% would be available for investments by small businesses in information and communications technologies

between 1 April 2000 and 31 March 2003.

E.Corporation tax self-assessment

Every year, limited companies will receive a request from the Inland Revenue to complete a corporation tax return. The corporation tax return is a formknown as CT600 and it asks for details such as the company�s turnover, its trading profits or losses and other sources of income to arrive at the amountof corporation tax due. Along with form CT600, a copy of the company�s accounts including its balance sheet and trading and profit and loss accountmust also be filed.

All companies with a source of income�no matter how small�have to fill out form CT600, even if they have made a loss.

F.When is corporation tax due?

Corporation tax is due 9 months and one day after the end of the company�s accounting period.

G.What if I make a loss?

If your company makes a loss, you will not have to pay corporation tax. The loss can also be carried forward each year and used against any future

profits to reduce your tax bill.

33


Do-It-Yourself

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34


Do-It-Yourself

12.Annual AccountsA. What are annual accounts?

B. How do I know what to file?

C. The Accounting Reference Date (ARD)

D. When are accounts due?

E. What if accounts are delivered late?

Chapter 12 | Annual accounts

u 12. Annual accounts

A.What are annual accounts?

By law, a company has to file annual accounts at Companies House every year. The documents it files depend upon the size of the company. The larger

the company, the more documents it will be required to supply, and the more detailed their content will need to be.

B. How do I know which documents to file?

You will need to determine the size of your company at the end of its financial year. A company with a turnover less than £1 million, and with a balance

sheet total of less than £1.4 million, is considered �very small� and will only have to file one document as follows:

�� an abbreviated balance sheet signed by a director, and containing an exemption statement declaring that it is exempt from filing full accounts

due to its size

Companies with a balance sheet totalling more than £1.4 million, and with a turnover of more than £1 million, will be required to file a profit and loss

account, a director�s report and they must also have their accounts audited by an auditor. An auditor is an independent person or body who verifies

that the accounts are correct and true.

C. The all-important Accounting Reference Date (ARD)

All companies have an Accounting Reference Date. This is the date which its financial year ends on�it is the date the company�s annual accounts are

made up to, and by default it is set as the last day of the month during which the company was incorporated on.

�� For example, a company incorporated on 20th August 2000, will have an Accounting Reference Date of 31st August.�� Likewise, a company incorporated on 3rd January 2000 will have an Accounting Reference Date of 31st January.

For a new company, its first financial year will start on the day it was incorporated and end on its Accounting Reference Date. For example, the first

financial year for a company incorporated on 20th August 2000 will cover the period from 20th August 2000 to 31st August 2001. All subsequent

financial years begin on the day after the Accounting Reference Date. So the second financial year for the example we just mentioned would cover the

period from 1st September 2001 through to 31st August 2002, and these dates would remain the same for every subsequent year thereafter.

D. When are accounts due?

Accounts are due 10 months from the company�s Accounting Reference Date. So, if your company�s Accounting Reference Date is 31st July, your first

set of accounts will need to arrive at Companies House on or before Midnight 31st May the following year.

It is important that you are aware of the definition of months in connection with filing accounts. The Accounting Reference Date corresponds exactly

with the date in the month for which accounts are due. For example, if your company has an Accounting Reference Date of 30th September

(September has only 30 days), then the accounts will be due on 30th July the following year, not 31st July. If there is no corresponding date�for

example, a company with an ARD of 30th April�then the last day of the month would apply, so in this case, the accounts would be due on 28th February

the following year.

35


Do-It-YourselfChapter 12 | Annual Accounts

6Accounting Refence Date 6Deadline for delivery to Companies House

31st January 30th November

28th/29th February 28th/29th December

31st March 31st January

30th April 28th/29th February

31st May 31st March

30th June 30th April

31st July 31st May

31st August 30th June

30th September 30th July

31st October 31st August

30t November 30th September

31st December 31st October

6Period of late filing 6Fine

Less than 3 months late £100

Between 3 and 6 months late £250

Between 6 and 12 months late £500

More than 12 months late £1000

D. What if accounts are delivered late?

It is extremely important that you file correct accounts in time. There are automatic penalties applied to companies which fail to deliver their accounts,

and this can be as little as £100 if the accounts are overdue by not more than 3 months, right up to £1000 for accounts that are over a year late. More

importantly though, the director of the company is considered personally liable for making sure that accounts arrive on time, and failing to ensure their

arrival is a criminal offence for which he or she can be prosecuted. Companies House are extremely strict on imposing these penalties, even if the

accounts are one day late�so don�t leave those figures until the last minute!

36


Do-It-Yourself

Example Memorandumof Association

A

Appendix A | Example Memorandum Of Association

COMPANIES ACTS 1985 TO 1989PRIVATE COMPANY LIMITED BY SHARES

MEMORANDUM OF ASSOCIATION OF

DIZZY NEW MEDIA LIMITED

* * *

1. The Company�s name is Dizzy New Media Limited

2. The registered office of the Company will be situated in England and Wales

3. The objects for which the Company is established are:

(A) To carry on, in conjunction with each other or as separate and distinct undertakings, all or any of the following businesses namely:

a general commercial company;

manufacturers, importers, exporters, agents, dealers (both wholesale and retail) in all articles of commercial, manufacturing, personal andhousehold use and consumption and in all kinds of raw materials; warehousemen, storage contractors, shipping and forwarding agents;dealers in property and estates, property developers, property managers, investors in property; estate agents, insurance agents andbrokers, accountants, financiers, financial agents and to act as nominee, trustee, agent, factor, broker, executor, administrator receiver foror otherwise on behalf of Companies, Corporations, firms or persons, builders; scaffolders; contractors; heating and ventilation engineersand contractors; refrigeration engineers, specialists and contractors; decorators; painters; bricklayers, carpenters; shuttering manufacturersand erectors; joiners; public works contractors; plasterers, plumbers, electricians, shop front fitters; builders� and decorators� merchants;civil, mechanical, constructional, agricultural, consulting, heating, electrical and general engineers; welders; sheet metal workers; blacksmiths,motor engineers; garage proprietors; car hire service, taxi proprietors and operators, travel agents, tour operators, proprietors ofvehicles and vessels of all kinds, transport and haulage contractors; general engineers; tool makers; booking agents for, and managers oftheatres, cinemas and all other kinds of entertainments and sporting events; turf and sporting accountants in all their branches, proprietorsof shops, cafes, clubs, hotels and restaurants, catering contractors; dealers in foods and provisions of all kinds; wine and spirit merchants;butchers; grocers, greengrocers; fishmongers and poultry merchants, farmers; florists, horticulturists; bakers; confectioners, tobacconists;ironmongers, hardware merchants; dealers in plastics of all kinds, antique dealers; furniture manufacturers and dealers; leather and fancygoods dealers; jewellers, radio television and electrical retailers, dealers and repairers, toys games and sports equipment dealers;photographers and dealers in all kinds of photographic material and equipment, film producers and distributors; textile merchants, tailors,fashion designers, ladies and gentlemen�s outfitters, boot and shoe retailers, perfumery and cosmetic dealers, hairdressers; manufacturing

1

1

2

MEMORANDUM OF ASSOCIATIONDIZZY NEW MEDIA LIMITED

�

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Do-It-YourselfAppendix A | Example Memorandum Of Association

and retail chemists, printers, publishers, stationers, advertising and publicity agents, public relation specialists, consultants, businesstransfer agents and employment agents, computer operators, programmers and dealers; market research specialists, business advisers, mailorder specialists; dyers and cleaners, dry cleaners, proprietors of launderettes, excavation and demolition contractors; provision ofsecurity services, plant hirers, scrap iron and waste merchants and to carry on all or any of the said businesses, and provide services inconnection therewith, either together as one business or as separate and distinct businesses, in any part of the world.

(B) To carry on any other business which in the opinion of the Directors of the Company may seem capable of being conveniently carried outin connection with or as ancillary to any of the above businesses or to be calculated directly or indirectly to enhance the value of or renderprofitable any of the property of the Company or to further any of its objects.

(C) To build, construct, maintain, alter enlarge, pull down, remove or replace any buildings, works, plant, and machinery necessary or convenientfor the business of the Company or to join with any person, firm or company in doing any of the things aforesaid.

(D) To purchase, take on lease, exchange, hire or otherwise acquire for any estate or interest any real or personal property and any rights orprivileges which the Company may think necessary or convenient for the purposes of its business.

(E) To borrow or raise money upon such terms and on such security as may be considered expedient and in particular by the issue or depositof debentures or debenture stock (whether perpetual or not) and to secure the repayment of any money borrowed, raised or owing bymortgage charge or lien upon the whole or any part of the undertaking property and assets of the Company, both present and future,including its uncalled capital.

(F) To apply for, purchase or otherwise acquire any patents, licences and the like, conferring any exclusive or non-exclusive or limited right ofuse or any secret or other information as to any invention which may seem capable of being used for any of the purposes of the Companyor the acquisition of which may seem calculated directly or indirectly to benefit the Company, and to use, exercise, develop, grant licencesin respect of, or otherwise turn to account any rights and information so acquired.

(G) To purchase, subscribe for or otherwise acquire and hold and deal with any shares, stocks or securities of any other company having objectswholly or in part similar to the objects of the Company or carry on any business capable of being conducted so as directly or indirectly tobenefit the Company.

(H) To issue, place, underwrite, or guarantee the subscription of, or concur or assist in the issuing or placing, underwriting, or guaranteeing thesubscription of shares, debentures, debenture stock, bonds, stocks, and securities of any company, whether limited or unlimited orincorporated by Act of Parliament or otherwise, at such times and upon such terms and conditions as to remuneration and otherwise asmay be agreed upon.

(I) To invest and deal with monies of the Company not immediately required for the purposes of its business in or upon such investments andsecurities and in such manner as may from time to time be considered expedient and to dispose of or vary any such investments orsecurities.

(J) To lend money or give credit to such persons, firms or companies and on such terms as may be considered expedient and to receive moneyon deposit or loan from and give guarantees or become security for any persons, firms and companies and to charge any properties orproperty of the Company in support of any guarantee or to secure the debts or obligations, contracts or engagements of any othercompany or person.

(K) To enter into any arrangement with any Government or other authority, supreme, municipal, local or otherwise, and to obtain from anysuch Government or authority all rights, concessions, and privileges which may seem conducive to the Company�s objects or any of them,or to obtain or to endeavour to obtain, any provisional order of the Board of Trade, or any Act or Acts of Parliament for the purposes ofthe Company or any other company.

(L) To enter into partnership or into any arrangement for sharing profits or to amalgamate with any person, firm or company carrying on orproposing to carry on any business which the Company is authorised to carry on or any business or transaction capable of being conductedso as directly or indirectly to benefit the Company.

(M) To establish or support or aid in the establishment and support of associations, institutions, clubs, funds, trusts, and schemes calculatetobenefit the officers, ex-officers, employees or ex-employees of the Company or of any subsidiary, allied or associated company or thefamilies, dependants or connections of such persons, and to grant pensions, gratuities and allowances and to make payments towardsinsurance, and to subscribe or guarantee money for charitable or benevolent objects or for any exhibition or for any public, general oruseful objects.

(N) To sell, exchange, lease, dispose of, turn to account or otherwise deal with the whole or any part of the undertaking of the Company forsuch consideration as may be considered expedient and in particular for shares, stock or securities of any other company formed or to beformed.

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Do-It-YourselfAppendix A | Example Memorandum Of Association

(O)To promote, finance or assist any other company for the purpose of acquiring all or any part of the property rights and liabilities of theCompany or for any other purpose which may seem directly or indirectly calculated to benefit the Company.

(P) To pay all or any of the preliminary expenses of the Company and of any company formed or promoted by the Company.

(Q)To remunerate any person, firm or company rendering services to the company in such manner as may be thought expedient.

(R) To draw, accept, endorse, negotiate, execute and issue promissory notes, bills of exchange, scrip, warrants and other transferable ornegotiable instruments.

(S) To distribute among the Members in specie any property of the Company, or any proceeds of sale or disposition of any property of theCompany, and for such purpose to distinguish and separate capital from profits, but so that no distribution amounting to a reduction ofcapital be made except with the sanction, (if any) for the time being required by law.

(T) To purchase or otherwise acquire all or any part of the business or assets of any person, firm or company, carrying on or formed to carryon any business, and to pay cash or to issue any shares, stocks, debentures or debenture stock of this Company as the consideration forsuch purchase of acquisition and to underake any liabilities or obligations, relating to the business or property so purchase or acquired.

(U) To do all or any of the above things in any part of the world either alone or in conjunction with others and either as principals, agents,contractors, trustees or otherwise and either by or through agents, sub-contractors, trustees or otherwise.

(V) To do all such other things as may be deemd incidental or conducive to the attainment of the above objects or any of them.

4. The liability of the members is limited

5. The share capital of the Company is £100 divided into 100 shares of £1 each.

6. The shares in the original or any increased capital of the Company may be issued with such prefered, deferred or other special rights orrestrictions, whether in regard to dividend, voting return of capital or otherwise as the Company may from time to time determine. Therights and privileges attached to any of the shares of the Company may be modified, varied, abrogated or dealt with in accordance with theprovisions for the time being of the Company�s Articles of Association.

I, the person whose name and address is subscribed, am desirous of being formed into a Company, in pursuance of this Memorandum ofAssociation, and I agree to take the number of shares in the capital of the Company as set opposite my name.

NAME AND ADDRESS OF SUBSCRIBERS NO. OF SHARES TAKEN BY THE SUBSCRIBERS (IN WORDS)

David PETTIFER,22 Brook Road, �ONE�Shanklin,Isle of Wight PO37 7LU

James THOMAS,31 Albert Road, �TWO�Shanklin,Isle of Wight PO38 8BX

Dated 1st January 2001

Witness to the above signatures:

Tim Younger,Underwood House,38 Regent Street,London W1 3JB

4

3

5

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Do-It-Yourself

Example Articlesof Association

B

COMPANIES ACTS 1985 TO 1989PRIVATE COMPANY LIMITED BY SHARESARTICLES OF ASSOCIATION OF

DIZZY NEW MEDIA LIMITED* * *

Preliminary

1. The Company shall be a private company within the meaning of the Companies Act, 1985 (hereinafter referred to as �the Act�) and subject ashereinafter provided by the regulations contained in The Companies (Tables A to F) Regulations 1985 as in force at the date of incorporationof the Company. Such regulations (hereinafter referred to as �Table A�) shall apply to the Company.

2. Regulations 60, 61, 64, 73, 74, 75, 81(e), 89, 94, 95, 96, 97 and 98 of Table A shall not apply to the Company but the Articles hereinafter containedtogether with the remaining regulations of Table A, subject to the modifications hereinafter expressed, shall constitute the regulations of theCompany.

General Meetings

3. In every notice calling a General Meeting of the Company there shall prominently appear a statement that a member who is entitled to attendand vote is entitled to appoint a proxy to attend and vote instead of that member and that the proxy need not be a member of the Company.Every notice calling a General Meeting of the Company shall also be sent to the current Auditors of the Company.

4. One member may constitute a quorum where the Company is a single member company.

Auditors

5. The appointment of an auditor shall be subject to the regulations concerning exemption from such an appointment where the relevant criteriaas defined by the Act are met.

Share Capital

6. The Company is a private company limited by shares, within the meaning of the Act.

7. The directors of the Company are authorised during the period of five years from the date of incorporation of the Company to allot or grantoptions over shares of the company to such persons at such times and on such conditions as they think fit, up to a maximum aggregate nominalamount of such shares of £100,000, subject to the provisions of Articles 8 and 9 hereof and provided that no share shall be issued at adiscount.

8. Subject to any direction to the contrary that may be given by the Company in general meeting, any original shares for the time being unissued andany new shares from time to time to be created, shall, before they are issued, be offered to the members in proportion as nearly as possibleto the nominal value of the existing shares held by them and such offer shall be made by notice specifying the number of shares to which themember is entitled and limiting a time within which the offer if not accepted shall be deemed declined, and after the expiration of such time

Appendix B | Example Articles of Association

DIZZY NEW MEDIA LIMITEDARTICLES OF ASSOCIATION

1

2

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or on receipt of an intimation from the member to whom the notice is given that he declines to accept the shares, the directors may disposeof the same in such manner as they think most beneficial to the Company. The provisions of section 89 of the Act shall have effect only insofaras they are not inconsistent with this Article.

9. A member desiring to transfer shares otherwise than to a person who is already a member of the Company shall give notice in writing of suchintention to the Directors of the Company giving particulars of the share in question. The directors as agents for the member giving suchnotice may dispose of such shares or any of them to members of the Company at a price to be agreed between the transferor and theDirectors, or failing agreement, at a price fixed by the Auditors of the Company as the fair value thereof. If within twenty-eight days from thesaid notice the Directors are unable to find a member or members willing to purchase all such shares, the transferor may dispose of so manyof such shares as shall remain undisposed of in any manner he may think fit within three months from the date of the said notice. Where theCompany has no auditor an individual or body eligible for appointment as an auditor as per the Companies Act shall be chosen to fix the price.

Appointment of Directors

10. The first director or directors of the Company shall be determined in writing by the subscriber(s) to the Memorandum of Association,pursuant to section 10 of the Act.

11. Unless otherwise determined by ordinary resolution, the numbers of directors (other than alternate directors) shall not be subject to anymaximum, but shall be not less than one.

12. A person may be appointed a director of the Company notwithstanding that he has attained the age of seventy years and no directors shall beliable to vacate the office by reason only of his having attained that age or any other age.

Proceedings of Directors

13. A director may vote as a director in regard to any contract or arrangement in which he is interested or upon any matter arising thereout, andif he shall so vote, his vote shall be counted and he shall be reckoned in estimating a quorum when any such contract or arrangement is underconsideration.

14. The necessary quorum for the transaction of the business of the directors may be fixed by them and unless so fixed, shall be two, except whenone director is in office. A person who holds office only as an alternate director shall, if his appointer is not present, be counted in the quorum.

15. The directors may exercise all of the powers mentioned in the Memorandum of Association part 3.

Secretary

16. The first secretary of the Company shall be determined in writing by the subscriber(s) to the

Memorandum of Association, pursuant to Section 10 of the Act.

Seal

17. In accordance with the provisions of the Act the Company need not have a seal. If it does have a seal Regulation 101 of Table A shall apply.

Signatures, names and addresses of subscribers

David PETTIFER, James Thomas,22 Brook Road, 31 Albert Road,Shanklin, Shanklin,Isle of Wight PO37 7LU Isle of Wight PO38 8BX

Dated this day 1st day of January the year 2001


Tim Younger,Underwood House,38 Regent Street,London W1 3JB

3

Appendix B | Example Articles of Association

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Do-It-Yourself

Registers and sharecertificates

C

u Example share certificate

u Example Register of Members

u Example Register of Directors

u Example Register of Secretaries

u Example Register of Directors� Interests

DIZZY NEW MEDIA LIMITEDORDINARY SHARES

INCORPORATED IN ENGLAND AND WALES UNDER THE COMPANIES ACT 1985 - REGISTERED NO. 3168697

This is to certify that

Mr James THOMAS

31 Albert Road

Shanklin Isle of Wight

PO38 8BX

is/are the registered holder(s) of

Two

Ordinary Shares of 1 pound each fully paid in Dizzy New Media Limited, subject to the Memorandum and Articles of Association of the

said Company.

Given under the Signatures of a Director and the Company Secretary on 5th January 2001

CHAIRMAN COMPANY SECRETARY

Certificate No. Number of Shares

123456 �2�

Appendix C | Example ordinary share certificate

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NAME

David John PETTIFERADDRESS

22 Brook Rd, Shanklin, Isle of Wight, PO37 7LUDATE OF ENTRY AS SHAREHOLDER

05-01-2001

Date of AllotmentOR

Entry of Transfer

References in Register

AllotmentsTransfers

Numberof

shares

Numberof

certificate

Amount paid ORagreed to be

considered as paidAquisitions

DIVIDENDS TO

Mr David John PettiferCLASS OF SHARE

*ORDINARY*DENOMINATION

*£1 each*

Disposals Balance Remarks

Appendix C | Register of Members

—REGISTER OF MEMBERS—

05-01-2001 a 11 £1 £1

�

NAME

James THOMASADDRESS

31 Albert Rd, Shanklin, Isle of Wight PO38 8BXDATE OF ENTRY AS SHAREHOLDER

05-01-2001

Date of AllotmentOR

Entry of Transfer


AllotmentsTransfers

Numberof

shares

Numberof

certificate



DIVIDENDS TO

Mr James ThomasCLASS OF SHARE

*ORDINARY*DENOMINATION

*£1 each*


05-01-2001 a 22 £2 £2

NAME

ADDRESS

DATE OF ENTRY AS SHAREHOLDER

Date of AllotmentOR

Entry of Transfer


AllotmentsTransfers

Numberof

shares

Numberof

certificate



DIVIDENDS TO

CLASS OF SHARE

DENOMINATION


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SURNAME OR CORPORATE NAME

THOMASFORENAMES

JamesANY FORMER FORENAMES OR SURNAMES

_NATIONALITY DATE OF BIRTH

British *15th April 1967*RESIDENTIAL ADDRESS (OR REGISTERED OR PRINCIPAL OFFICE)

31 Albert Road,Shanklin,Isle of Wight,PO38 8BX

OTHER DIRECTORSHIPS

��

Date of resignation

—REGISTER OF DIRECTORS—

BUSINESS OCCUPATION

AccountantDATE OF APPOINTMENT MINUTE

05-01-2001 05-01-2001DATE OF FILING PARTICULARS

29-12-2000DATE OF RESIGNATION/CESSATION MINUTE

�DATE OF FILING PARTICULARS

�


PETTIFERFORENAMES

David JohnANY FORMER FORENAMES OR SURNAMES

_NATIONALITY DATE OF BIRTH

British *15th May 1980*RESIDENTIAL ADDRESS (OR REGISTERED OR PRINCIPAL OFFICE)

22 Brook RoadShanklinIsle of WightPO37 7LU

OTHER DIRECTORSHIPS

��

Date of resignation

BUSINESS OCCUPATION

PublisherDATE OF APPOINTMENT MINUTE

05-01-2001 05-01-2001DATE OF FILING PARTICULARS

29-12-2000DATE OF RESIGNATION/CESSATION MINUTE

�DATE OF FILING PARTICULARS

�

Appendix C | Register of Directors

�


FORENAMES

ANY FORMER FORENAMES OR SURNAMES

NATIONALITY DATE OF BIRTH

RESIDENTIAL ADDRESS (OR REGISTERED OR PRINCIPAL OFFICE)

OTHER DIRECTORSHIPS Date of resignation

BUSINESS OCCUPATION

DATE OF APPOINTMENT MINUTE

DATE OF FILING PARTICULARS

DATE OF RESIGNATION/CESSATION MINUTE


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YOUNGERFORENAMES

TimANY FORMER FORENAMES OR SURNAMES

_DATE OF APPOINTMENT MINUTES

29-12-2000 *05-01-2001*DATE OF FILING PARTICULARS

29-12-2000

—REGISTER OF SECRETARIES—


Underwood House,36 Regent Street,Oxford Circus,London W1 3JB


� �DATE OF FILING PARTICULARS

�


FORENAMES


DATE OF APPOINTMENT MINUTES






FORENAMES







Appendix C | Register of Secretaries

�


FORENAMES







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NAME AND ADDRESS OF PERSON INTERESTED

James THOMAS31 Albert Rd, Shanklin, Isle of Wight, PO38 8BX


05/01/01Entry

No.Nature of event

CLASSES OF SHARE CAPITAL OR DEBENTURES

*ORDINARY*(A) 2 shares of £1 each(B) �

—REGISTER OF DIRECTORS’ I NTERESTS—

Date

Entry

Event Notification

No. of shares involved

AcquisitionsPrice

considerationDisposals

No. of shares inwhich interested

after eventRemarks

1 05/01/01 29/12/00 05/01/01 Subscriber to the Memorandum 2 2 £2

Appendix C | Register of Directors� Interests

�


David John PETTIFER22 Brook Rd, Shanklin, Isle of Wight, PO37 7LU


05/01/01Entry

No.Nature of event


*ORDINARY*(A) 1 share of £1 each(B) �

Date

Entry

Event Notification


AcquisitionsPrice



after eventRemarks

1 05/01/01 29/12/00 05/01/01 Subscriber to the Memorandum 1 1 £1



Entry

No.Nature of event


(A)

(B) �

Date

Entry

Event Notification


AcquisitionsPrice



after eventRemarks

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Notices, minutes& resolutions

Du First minutes of the first meeting of directors

u Example of written board resolutions

u Example notice of extraordinary general meeting

u Example form of consent to short notice of EGM

u Example minutes of extraordinary general meeting

u Example ordinary and special resolutions

u Example written shareholders� elective resolutions

DIZZY NEW MEDIA LIMITEDMINUTES OF THE FIRST MEETING OF DIRECTORS

5TH JANUARY 2001Minutes of the first Meeting of the Directors held on 5th January 2001 at 1:30 pm at Suite 173, 73 Buckingham Palace Road, London, SW1W 0RE

PresentDavid Pettifer (In the Chair)James Thomas

Tim Younger (Secretary)1. The Chairman confirmed that notice of the meeting had been given to all the directors of the Company and announced that a quorum of the board of directors was present.

The Chairman declared the Meeting open.2. The Chairman reported that the Company had been incorporated on 1st January 2001 and produced the certificate of incorporation and a print of the Memorandum and

Articles of Association of the Company as filed at Companies House.3. It was noted that pursuant to Section 10 of the Companies Act 1985, the first Directors of the Company are

(i) Mr David Pettifer

(ii) Mr James Thomasand the first secretary is(iii) Mr Tim Younger

4. It was further noted that the registered office of the Company was situated at:(i) Suite 173, 73 Buckingham Palace Road, London, SW1W 0RE

It was resolved that:

5. Betchley & Wilson Financial Services be appointed auditors to the Company to act as such until the conclusion of the first annual general meeting of the Company and thattheir remuneration be at a rate to be subsequently agreed;

6. That the accounts of the Company be made up to 31st January each year.;

7. that a bank account for the Company be opened with Natwest Bank Plc, Oxford Street branch, in accordance with the mandate lodged with the Bank;8. that David Pettifer and James Thomas, having each subscribed to the Memorandum and Articles of Association for one ordinary share of £1 each and two ordinary shares

of £2 each respectively, that the respective shares shall be allotted and issued to them and certificates be issued in respect of such shares, and that their names be enteredin the register of members;

9. that Mr David Pettifer be and he is hereby appointed Chairman of the Directors;10. that the Secretary was instructed to register the Company with HM Customs & Excise for the purposes of VAT and to supply particulars to the Inland Revenue for tax

purposes;11. that the Secretary was instructed to arrange for a nameplate to be ordered and affixed outside the registered office of the Company;12. that the Secretary be instructed to arrange for the filing with the Registrar of Companies all necessary returns, including:

(i) Form 88(2) (Return of Allotments of Shares);

There being no further business the Meeting was closed.

CHAIRMAN

Appendix D | Example minutes of directors� first meeting

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DIZZY NEW MEDIA LIMITEDWRITTEN BOARD RESOLUTIONS

5TH JANUARY 2001

Resolution of all the Directors in Office

Pursuant to the Company�s Articles of Association

The Directors hereby confirm that they have before them the following:

1. the Certificate of Incorporation of the Company (under No. 3618697) dated 1st January 2001;

2. a copy of the Memorandum and Articles of Association of the Company as registered

It was resolved that:

1. Betchley & Wilson Financial Services be appointed auditors to the Company to act as such until the conclusion of the first annual general meeting of theCompany and that their remuneration be at a rate to be subsequently agreed;

2. That the accounts of the Company be made up to 31st January each year;

3. that a bank account for the Company be opened with Natwest Bank Plc, Oxford Street branch, in accordance with the mandate lodged with the Bank;

4. That David Pettifer and James Thomas, having each subscribed to the Memorandum and Articles of Association for one ordinary share of £1 each and twoordinary shares of £2 each respectively, that the respective shares shall be allotted and issued to them and certificates be issued in respect of such shares, andthat their names be entered in the register of members;

5. That Mr David Pettifer be and he is hereby appointed Chairman of the Directors;

6. That the Secretary was instructed to register the Company with HM Customs & Excise for the purposes of VAT and to supply particulars to the InlandRevenue for tax purposes;

7. That the Secretary was instructed to arrange for a nameplate to be ordered and affixed outside the registered office of the Company;

8. That the Secretary be instructed to arrange for the filing with the Registrar of Companies all necessary returns, including:

(i) Form 88(2) (Return of Allotments of Shares);

DIRECTOR DIRECTOR

Appendix D | Example written board resolutions

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DIZZY NEW MEDIA LIMITEDNOTICE OF EXTRAORDINARY GENERAL MEETING

31ST JANUARY 2001Notice is hereby given that an Extraordinary General Meeting of the above-named Company will be held at Suite 173, 73 Buckingham Palace Road,

London, SW1W 0RE on 31st January 2001 at 2:00pm for the purpose of considering, and if thought fit, passing the following resolutions of whichthe resolution numbered 1 will be proposed as an ordinary resolution and the resolution numbered 2 will be proposed as a special resolution:

—ORDINARY RESOLUTION—

1. That the authorised share capital of the Company be and is hereby increased from £100,000 to £500,000 by the creation of 400,000 ordinary sharesof £1 each to rank pari passu in all respects with the capital of the company.

—SPECIAL RESOLUTION—

2. That the name of the Company be changed to �Dizzy Publishing Limited�

By order of the board

SECRETARY

Dated 6th January 2001

Registered Office: Suite 173, 73 Buckingham Palace Road, London, SW1W 0RE

Note:

A member entitled to attend and vote at the Extraordinary General Meeting convened by this notice may appoint a proxy to attend and (on a poll) vote

in his stead. A proxy need not be a member of the Company.

To appoint a proxy the enclosed form should be completed and deposited at the registered office of the Company not less than 48 hours before the time

of the Meeting specified above or of the adjourned meeting at which the proxy proposes to vote.

Appendix D | Example notice of EGM

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DIZZY NEW MEDIA LIMITEDFORM OF CONSENT TO SHORT NOTICE

OF

EXTRAORDINARY GENERAL MEETING

We, the undersigned being a majority in number of the Members of the Company having the right to attend and vote at Extaordinary General Meeting of the

Company to be held 31st January 2001 (�the Meeting�) and together holding not less than 95 per cent in nominal value of the shares giving that right, hereby

agree that the Meeting shall be deemed to have been duly convened and held and that the resolutions set out in the notice of the Meeting may be proposed

and passed as ordinary and special resolutions notwithstanding that less than the requisite notice thereof as specifried in the Companies Act 1985 or in the

Company�s Articles of Association has been given.

DAVID PETTIFER JAMES THOMAS

Dated 30th January 2001

Appendix D | Example form of consent to short notice of EGM

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DIZZY NEW MEDIA LIMITEDMINUTES

OFEXTRAORDINARY GENERAL MEETING

Minutes of an Extraordinary General Meeting of the Company held at Suite 173, 73 Buckingham Palace Road, London, SW1W 0RE on 31st January 2001

at 2:30pm.

Present

David Pettifer (In the Chair)

James Thomas

Tim Younger (Secretary)

1. The Chairman announced that a quorum was present and declared the Meeting open.

2. The Chairman announced that the necessary majority of the members of the Company had consented to the holding of the Meeting at short notice.

3. The Chairman proposed that the authorised share capital of the Company be and is hereby increased from £100,000 to £500,000 by the creation

of 400,000 ordinary shares of £1 each to rank pari passu in all respects with the capital of the company and such ordinary resolution was passed

unanimously.

4. The Chairman proposed that the name of the Company be changed to �Dizzy Publishing Limited� and such special resolution was passed

unanimously.

5. There being no further business, the Chairman declared the Meeting closed.

CHAIRMAN

Appendix D | Example minutes of EGM

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DIZZY NEW MEDIA LIMITEDORDINARY & SPECIAL RESOLUTIONS

31ST JANUARY 2001

COMPANIES ACT 1985PRIVATE COMPANY LIMITED BY SHARES

ORDINARY AND SPECIAL RESOLUTIONS OF


(passed 31st January 2001)

At an Extraordinary General Meeting of the above-named company duly convened and held on 31st January 2001 the following resolutions were dulypassed as ordinary and special resolutions respectively:

—ORDINARY RESOLUTION—

1. That the authorised share capital of the Company be and is hereby increased from £100,000 to £500,000 by the creation of 400,000 ordinaryshares of £1 each to rank pari passu in all respects with the capital of the company

—SPECIAL RESOLUTION—

2. That the name of the Company be changed to �Dizzy Publishing Limited�

CHAIRMAN

Appendix D | Example ordinary and special resolutions

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DIZZY NEW MEDIA LIMITEDWRITTEN SHAREHOLDERS’ RESOLUTIONS

31ST JANUARY 2001

COMPANIES ACT 1985PRIVATE COMPANY LIMITED BY SHARES

ORDINARY AND SPECIAL RESOLUTIONS OF


(passed 31st January 2001)

Pursuant to the Articles of Association of the Company, we, the undersigned being all the members of the Company entitled to attend and vote at aGeneral Meeting of the Company hereby agree and confirm that the following resolutions shall be as valid and effectual as if they had been passedas elective resolutions at a General Meeting of the Company duly convened and held accordingly we hereby resolve:

1. THAT in accordance with the provisions of Section 252 of the Companies Act 1985 the Company hereby dispenses with the laying of accounts andreports before the Company in General Meeting in respect of the year ending 31st January 2001 and subsequent financial years

2. THAT in accordance with the provision of Section 366A of the Companies Act 1985 the Company hereby dispenses with the holding of the AnnualGeneral Meeting for 2001 and subsequent years.

3. THAT in accordance with the provisions of Section 386 of the Companies Act 1985 the Company hereby dispenses with the obligation to appointauditors annually and that during the term that the dispensation is in force the directors be and they are hereby authorised to fix the auditors�remuneration.

DAVID PETTIFER JAMES THOMAS

Appendix D | Example written shareholders� electiveresolution

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Example completedforms

Eu Example completed form 12

u Example completed form 10

u Example completed form 88(2)

Please complete in typescript,or in bold black capitals.

CHFP138

Company Name in full

I,

do solemnly and sincerely declare that I am a [Solicitor engaged in the formation of thecompany][person named as director or secretary of the company in the statement deliveredto the Registrar under section 10 of the Companies Act 1985] and that all the requirementsof the Companies Act 1985 in respect of the registration of the above company and ofmatters precedent and incidental to it have been complied with.

And I make this solemn Declaration conscientiously believing the same to be true and byvirtue of the Statutory Declarations Act 1835.

DX number

Companies House receipt date barcode

Form revised July 1998

Dizzy New Media Limited

David Pettifer

David Pettifer, 22 Brook Road,Shanklin, Isle of WightPO37 7LU 01983 867377

Please give the name, address,telephone number and, if available, aDX number and Exchange of theperson Companies House shouldcontact if there is any query.

of

Declarant’s signature

On

5 Victoria Avenue, Shanklin

before me William Lewis Jenkins

Signed

22 Brook Road, Shanklin

Leave this box blank44444

Thissectionmust becompletedby aSolicitor {

This must bethe director orsecretary of thecompany

{Please delete as appropriate.

1 Please print name.

12Declaration on application for registration

Day Month Year

Declared at

1

Appendix E | Example of a completed form 12

2 9 1 2 2 0 0 0

29 Dec 2000

Tel

DX exchange

A Commissioner for Oaths or Notary Public or Justice of the Peace or Solicitor

When you have completed and signed the form please send it to theRegistrar of Companies at:Comp anies House, Crown W ay, Cardiff, CF14 3UZ DX 33050 Cardifffor Companies registered in England and WalesorCompanies House, 37 Castle T errace, Edinburgh, EH1 2EBfor companies registered in Scotland DX 235 Edinburgh

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10First directors and secretary and intended situation ofregistered office

Please complete in typescript,or in bold black capitals.CHFP138

Notes on completion appear on final page


If the memorandum is delivered by anagent for the subscriber(s) of thememorandum mark the box opposite andgive the agent’s name and address.

County/Region

County/Region

Agent’s Name

Number of continuation sheets attached

When you have completed and signed the form please send it to theRegistrar of Companies at:Companies House, Crown Way, Cardiff, CF14 3UZ DX 33050 Cardifffor Companies registered in England and WalesorCompanies House, 37 Castle Terrace, Edinburgh, EH1 2EBfor companies registered in Scotland DX 235 Edinburgh



Please give the name, address,telephone number and, if available, aDX number and Exchange of theperson Companies House shouldcontact if there is any query.

Post town

Postcode

Post town

Postcode

Address


Suite 173, 34 Buckingham

Belgravia

London

33333As you are incorporating the company yourself, you will need toleave this box, and the boxes below, blank


David Pettifer, 22 Brook Road,Shanklin, Isle of WightPO37 7LU 01983 867377Tel

DX exchangeDX number

Palace Road

SW1W 0RE

55


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Company Secretary

Post town

Company name

Postcode

Consent signature

Mr

Oxford Circus

London

*Style/Title *Honours etc

Forename(s)

Surname

Previous forename(s)

Previous surname(s)

Country United Kingdom

Date

I consent to act as secretary of the company named on page 1

Directors

Post town

Postcode

Consent signature

22 Brook Road

Isle of Wight

*Style/Title

Forename(s)

Surname


Previous surname(s)


Date

I consent to act as director of the company named on page 1

Business occupation

Other directorships

Date of birth Nationality

County/Region

Day Month Year

TimYounger

Address Underwood House, 38 RegentStreet

MrDavid John

1

Pettifer

5 0 5 1 9 8 0

Publisher

(see notes 1-5)

NAME

*Voluntary details

Usual residential addressFor a corporation, give theregistered or principal officeaddress.

Address

NAME


Please list directors in alphabetical order(see notes 1-5)

*Honours etc

County/Region

Shanklin


W1 3JB


PO37 7LU

British

29 Dec 2000

29 Dec 2000

56


Do-It-Yourself

Directors

Signed

This section must be signed byEitheran agent on behalfof all subscribers

Or the subscribers

( i.e. those who signed as members on the memorandum of association).

Signed

Signed

Signed

Signed

Signed

Signed

Signed

(see notes 1-5)

Post town

Postcode

Consent signature

31 Albert Road

Isle of Wight

*Style/Title

Forename(s)

Surname


Previous surname(s)


Date


Business occupation

Other directorships


Day Month Year

MrJames

1

Thomas

5 0 4 1 9 6 7

Financial Adviser

Address

NAME


*Honours etc

County/Region

Shanklin

Date

Date

Date

Date

Date

Date

Date

Date


PO38 8BX

29 Dec 2000

29 Dec 2000

British

29 Dec 2000

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Notes

1. Show for an individual the fullforename(s) NOT INITIALS andsurname together with anyprevious forename(s) orsurname(s).

If the director or secretary is acorporation or Scottish firm - showthe corporate or firm name on thesurname line.

Give previous forename(s) orsurname(s) except that:

- for a married woman, thename by which she wasknown before marriageneed not be give,

- names not used since theage of 18 or for at least 20years need not be given.

A peer, or an individual known by atitle, may state the title instead ofor in addition to the forename(s)and surname and need not give thename by which that person wasknown before he or she adopted thetitle or succeeded to it.

Address:

Give the usual residential address.

In the case of a corporation orScottish firm give the registered orprincipal office.

Subscribers:

The form must be signedpersonally either by thesubscriber(s) or by a person orpersons authorised to sign onbehalf of the subscriber(s).

2. Directors known by another description:

- A director includes any personwho occupies that position evenif called by a different name, forexample, governor, member ofcouncil.

3. Directors details:

- Show for each individual directorthe director’s date of birth,business occupation andnationality.

The date of birth must begiven for every individualdirector.

4. Other directorships:

- Give the name of every companyof which the person concernedis a director or has been adirector at any time in the past 5years. You may exclude acompany which either is or at alltimes during the past 5 years,when the person was a director,was:

- Dormant

- a parent company which whollyowned the company making thereturn,

- a wholly owned subsidiary of thecompany making the return, or

- another wholly owned subsidiaryof the same parent company.

If there is insufficient space on the formfor other directorships you may use aseperate sheet of paper, which shouldinclude the company’s number and thefull name of the director.

5. Use Form 10 continuation sheetsor photocopies of page 2 toprovide details of joint secretariesor additional directors.


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88(2)Please complete in typescript, orin bold black capitals.CHFP138

Company Number 3618697Company name in full Dizzy New Media Limited

Shares allotted (including bonus shares):

Day Month Year

0 5 0 1 2 0 0 1

From

Day Month Year

ToDate or period during whichshares were allotted(If shares were allotted on one dateenter that date in the “from” box)

Class of shares(ordinary or preference etc)

Number allotted

Nominal value of each share

Amount (if any) paid or due on eachshare (including any share premium)


Form revised January 2000

When you have completed and signed the form please send it tothe Registrar of Companies at:

Companies House, Crown Way, Cardiff, CF4 3UZ DX 33050 CardiffFor companies registered in England and Wales

Companies House, 37 Castle Terrace, Edinburgh, EH1 2EB DX 235For companies registered in Scotland Edinburgh

List the names and addresses of the allottees and the number of shares allotted to each overleaf

If the allotted shares are fully or partly paid up otherwise than in cash please state:

% that each share is to betreated as paid up

Consideration for whichthe shares were allotted(This information must be supported by theduly stamped contract or by the dulystamped particulars on Form 88(3) if thecontract is not in writing)

Ordinary

3

£1

£3

Appendix E | Example of a completed form 88(2)

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Do-It-Yourself

Names and addresses of the allottees (List joint share allotments consecutively)

Please give the name, address,telephone number and, if available,a DX number and Exchange of theperson Companies House shouldcontact if there is any query.

David Pettifer, 22 Brook Road,Shanklin, Isle of Wight,PO37 7LU 01983 867377Tel


Shareholder details Shares and share class allotted

Name

Address

UK Postcode

Name

Address

UK Postcode

Name

Address

UK Postcode

Name

Address

UK Postcode

Name

Address

UK Postcode

Class of sharesallotted

Numberallotted


Numberallotted


Numberallotted


Numberallotted


Numberallotted

Ordinary 1

David Pettifer

22 Brook Road, Shanklin

Isle of Wight

P O 3 7 7 L U

James Thomas

31 Albert Road, Shanklin

Isle of Wight

P O 3 8 8 B X

Ordinary 2

Appendix E | Example of a completed form 88(2)

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u Words requiring approval of theSecretary of State

u Words requiring approval fromindependent bodies

u Words covered by other legislation

Sensitive words andexpressions

F

Appendix F | Sensitive words and expressions

u Sensitive words and expressions

uWords requiring approval of the Secretary of State

If you wish to use any of the following words in your company name, it is likely that you will be asked to supply supporting information before the

name can be registered. You should write, enclosing information in support of your application, to the Secretary of State for Trade and Industry at

Companies House in Cardiff (for English and Welsh companies) or in Edinburgh (for Scottish companies).

Association

Assurance

Assurer

Authority

Benevolent

Board

British

Chamber of Commerce

Chamber of Industry

Chamber of Trade

Charter

Chartered

Chemist

Chemistry

Co-operative

Council

England

English

European

Federation

Foundation

Friendly Society

Fund

Giro

Great Britain

Group

Holding

Industrial & Provident Society

Institute

Institution

Insurance

Insurer

International

Ireland

Irish

National

Patent

Patentee

Post Office

Reassurance

Reassurer

Register

Registered

Reinsurance

Reinsurer

Scotland

Scottish

Sheffield

Society

Stock Exchange

Trade Union

Trust

United Kingdom

Wales

Welsh

u Words requiring approval from independent bodies

If you wish to use any of the following words listed on the table on the opposite and following pages, then you will need to write to the relevant

body and ask if they have any objection (and if so, why) to your use of the word or expression in your company name. You must then write to the

Secretary of State for Trade and Industry at Companies House Cardiff or Edinburgh to ask for approval of the name, enclosing a copy of the reply

you have received from the relevant body.

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Abortion, Department of Health As for England and WalesPregnancy, Area 423Termination Wellington House

133-155 Waterloo RoadLondon SE1 8UG

Charity, Charity Commision Inland RevenueCharitable Registration Division Claims Branch

Harmsworth House Trinity Park House13-15 Bouverie Street South Trinity RoadLondon EC4Y 8DP Edinburgh EH5 3S

or for businesses not intending Charity Commissionto register as a charity 2nd Floor

20 Kings ParadeQueens DockLiverpool L3 4DQ

Contact Lens General Optical Council As for England and Wales41 Harley StreetLondon W1N 2DJ

Dental, Denistry General Dental Council As for England and Wales37 Wimpole StreetLondon W1M 8DQ

District Nurse, UK Central Council for NursingHealth Visitor, Midwifery andMidwife, Health VisitingMidwifery, 23 Portland PlaceNurse, London W1N 3JTNursing

Health Centre Department of Health & As for England and WalesSocial Security48 Carey StreetLondon WC2A 2LS

Health Service NHS Management Executive As for England and Walesto register as a charity Wellington House

135-155 Waterloo RoadLondon SE1 8UG

Police Home Office Scottish Home and HealthPolice Department DepartmentStrategy Group Police DivisionRoom 510 St Andrews House50 Queen Anne�s Gate Regent RoadLondon SW1H 9AT Edinburgh EH1 3DG

Polytechnic Department for Education As for England and Walesand ScienceSanctuary BuildingsGreat Smith StreetWestminsterLondon SW1P 3BT

Appendix F | Sensitive words and expressions

6Sensitive word or expression 6Body to contact in England & Wales 6Body to contact in Scotland

62


Do-It-YourselfAppendix F | Sensitive Words and Expressions

6Sensitive word or expression 6Body to contact in England & Wales 6Body to contact in Scotland

u Words covered by other legislation

Certain words are covered by specific legislation, and you will need to obtain written approval from the relevant body confirming that the use of

the word in your company name does not contravene that legislation.

Royal, Royale, Royalty, Home Office Scottish OfficeKing, Queen, Prince, Princess, A Division Home DepartmentWindsor, Duke, His/Her Majesty Room 730 Civil Law and Legal Aid Division

50 Queen Anne�s Gate Saugthon HouseLondon SW1H 9AT Broomhouse Driveor Edinburgh EH11 3XDWelsh OfficeCrown BuildingsCathays ParkCardiff CF1 3NQ

Special School Department for Education As for England and Walesand EmploymentSchools 2 BranchSanctuary BuildingsGreat Smith StreetWestminsterLondon SW1P 3BT

University Privy Council Office As for England and Wales68 WhitehallLondon SW1A 2AT

6Sensitive word or expression 6Body to contact

Anzac Contact Companies House for advice

Architect, Architectural Architects Registration Council of the United Kingdom73 Hallam StreetLondon W1N 6EE

Bank, Banker, Banking Deposit Bank of EnglandSupervision and SurveillanceThreadneedle StreetLondon EC2R 8AH

Building Society Building Societies CommissionVictoria House30-34 KingswayLondon WC2B 6ES

Chiropodist, Dietician, Room 12.26Medical Laboratory Technician, HAP4 DivisionOccupational Therapist, Department of HealthOrthoptist, Physiotherapist, Hannibal HouseRadiographer, Remedial Gymnast Elephant and Castle

London SE1 6TE

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Credit Union Registry of Friendly Societies15/17 Great Marlborough StreetLondon W1V 2AXX

for Companies registered in ScotlandAssistant Registrar of Friendly Societies58 Frederick StreetEdinburgh EH2 1NB

Dentist, Dental Surgeon, General Dental CouncilDental Practitioner 37 Wimpole Street

London W1M 8DQ

Drug, Druggist, Pharmaceutical, The Royal Pharmaceutical Society of Great BritainPharmaceutist, Pharmacist, Law DepartmentPharmacy 1 Lambeth High Street

London SE1 7JN

for Companies registered in ScotlandThe Pharmaceutical Society of Great Britain36 York PlaceEdinburgh EH1 3HU

Olympiad, Olympiads, Olympian, British Olympic AssociationOlympians, Olympic, Olympics 1 Wandsworth Plainor any translations of these words London SW18 1EH

Optician, Ophthalmic Optician, General Optical CouncilDispensing Optician, Enrolled 41 Harley StreetOptician, Registered Optician, London W1N 2DJOptometrist

Patent Office, Patent Agent IPCDHazlitt House45 Southampton BuildingsLondon WC2A 1AR

Red Cross, Red Crescent, Contact Companies House for adviceGeneva Cross

Veterinary Surgeon, Veterinary, Royal College of Veterinary SurgeonsVet 62-64 Horseferry Road

London SW1P 2AF

Appendix F | Sensitive Words and Expressions

6Sensitive word or expression 6Body to contact

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Table AG

Appendix G | Table A

COMPANIES ACT 1985 TABLE A(SI 1875/805, SCHEDULE)

REGULATIONS FOR MANAGEMENT OF ACOMPANY LIMITED BY SHARES

INTERPRETATION

1. In these regulations:

(a) �the Act� means the Companies Act 1985 including any statutory modification or re-enactment thereof for the time being in force.

(b) �the articles� means the articles of the company.

(C) �clear days� in relation to the period of a notice means that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which itis to take effect.

(d) �executed� means any mode of execution.

(e) �office� means the registered office of the company.

(f) �the holder� in relation to shares means the member whose name is entered in the register of members as the holder of the shares.

(g) �the seal� means the common seal of the company.

(h) �secretary� means the secretary of the company or any other person appointed to perform the duties of the secretary of the company, including a joint, assistant or deputy secretary.

(i) �the United Kingdom� means Great Britain and Northern Ireland.

(k) Unless the context otherwise requires, words or expressions contained in these regulations bear the same meaning as in the Act but excluding any statutory modifications thereof not inforce when these regulations become binding on the company.

SHARE CAPITAL

2. Subject to the provisions of the Act and without prejudice to any rights attached to any existing shares, any share may be issued with such rights or restrictions as the company maybyordinary resolution determine.

3. Subject to the provisions of the Act, shares may be issued which are to be redeemed or are to be liable to be redeemed at the option of the company or the holder on such terms andin such manner as maybe provided by the articles.

4. The company may exercise the powers of paying commissions conferred by the Act. Subject to the provisions of the Act, any such commission may be satisfied by the payment of cash orby the allotment of fully or partly paid shares or partly in one way and partly in the other.

5. Except as required by law, no person shall be recognised by the company as holding any share upon any trust and (except as otherwise provided by the articles or by law) the companyshall not be bound by or recognise any interest in any share except an absolute right to the entirety thereof in the holder.

SHARE CERTIFICATES

6. Every member, upon becoming the holder of any shares, shall be entitled without payment to one certificate for all the shares of each class held by him (and, upon transferring a part ofhis holding of shares of any class, to a certificate for the balance of such holding) or several certificates each for one or more of his shares upon payment for every certificate after the firstof such reasonable sum as the directors may determine. Every certificate shall be sealed with the seal and shall specify the number, class and distinguishing numbers (if any) of the sharesto which it relates and the amount or respective amounts paid up thereon. The company shall not be bound to issue more than one certificate for shares held jointly by several personsand delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.

7. If a share certificate is defaced, worn-out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and payment of the expenses reasonably incurred bythe company in investigating evidence as the directors may determine but otherwise free of charge, and (in the case of defacement or wearing-out) on delivery up of the old certificate.

LIEN

8. The company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys (whether presently payable or not) payable at a fixed time or called in respectof that share. The directors may at any time declare any share to be wholly or in part exempt from the provisions of this regulation. The company�s lien on a share shall extend to anyamount payable in respect of it.

9. The company may sell in such manner as the directors determine any shares on which the company has a lien if a sum in respect of which the lien exists is presently payable and is notpaid within fourteen clear days after notice has been given to the holder of the share or to the person entitled to it in consequence of the death or bankruptcy of the holder, demandingpayment and stating that if the notice is not complied with the shares may be sold.

10. To give effect to a sale the directors may authorise some person to execute an instrument of transfer of the shares sold to, or in accordance with the directions of, the purchaser. The titleof the transferee to the shares shall not be affected by any irregularity in or invalidity of the proceedings in reference to the sale.

11. The net proceeds of the sale, after payment of the costs, shall be applied in payment of so much of the sum for which the lien exists as is presently payable, and any residue shall (uponsurrender to the company for cancellation of the certificate for the shares sold and subject to a like lien for any moneys not presently payable as existed upon the shares before the sale)be paid to the person entitled to the shares at the date of the sale.

12. Subject to the terms of allotment, the directors may make calls upon the members in respect of any moneys unpaid on their shares (whether in respect of nominal value or premium) andeach member shall (subject to receiving at least fourteen clear days� notice specifying when and where payment is to be made) pay to the company as required by the notice the amountcalled on his shares. A call may be required to be paid by instalments. A call may, before receipt by the company of any sum due thereunder, be revoked in whole or part and paymentof a call may be postponed in whole or part. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the shares in respectwhereof the call was made.

CALLS ON SHARES AND FORFEITURE

13. A call shall be deemed to have been made at the time when the resolution of the directors authorising the call was passed.

14. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

15. If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payableuntil it is paid at the rate fixed by the terms of allotment of the share or in the notice of the call or, if no rate is fixed, at the appropriate (as defined by the Act) but the directors maywaive payment of the interest wholly or in part.

16. An amount payable in respect of a share on allotment or at any fixed date, whether in respect of nominal value or premium or as an instalment of a call, shall be deemed to be a call andif it is not paid the provisions of the articles shall apply as if that amount had become due and payable by virtue of a call.

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17. Subject to the terms of allotment, the directors may make arrangements on the issue of shares for a difference between the holders in the amounts and times of payment of calls on theirshares.

18. If a call remains unpaid after it has become due and payable the directors may give to the person from whom it is due not less than fourteen clear days� notice requiring payment of theamount unpaid together with any interest which may have accrued. The notice shall name the place where payment is to be made and shall state that if the notice is not complied withthe shares in respect of which the call was made will be liable to be forfeited.

19. If the notice is not complied with any share in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the directorsand the forfeiture shall include all dividends or other moneys payable in respect of the forfeited shares and not paid before the forfeiture.

20. Subject to the provisions of the Act, a forfeited share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the directors determine either to the personwho was before the forfeiture the holder or to any other person and at any time before sale, re-allotment or other disposition, the forfeiture may be cancelled on such terms as the directorsthink fit. Where for the purposes of its disposal a forfeited share is to be transferred to any person the directors may authorise some person to execute an instrument of transfer of theshare to that person.

21. A person any of whose shares have been forfeited shall cease to be a member in respect of them and shall surrender to the company for cancellation the certificate for the shares forfeitedbut shall remain liable to the company for all moneys which at the date of forfeiture were presently payable by him to the company in respect of those shares with interest at the rateat which interest which was payable on those moneys before the forfeiture or, if no interest was so payable, at the appropriate rate (as defined in the Act) from the date of forfeiture untilpayment but the directors may waive payment wholly or in part or enforce payment without any allowance for the value of the shares at the time of forfeiture or for any considerationreceived on their disposal.

22. A statutory declaration by a director or the secretary that a share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claimingto be entitled to the share and the declaration shall (subject to the execution of an instrument of transfer if necessary) constitute a good title to the share and the person to whom theshare is disposed of shall not be bound to see to the application of the consideration, if any, nor shall his title to the share be affected by any irregularity in or invalidity of the proceedingsin reference to the forfeiture or disposal of the share.

TRANSFER OF SHARES

23. The instrument of transfer of a share may be in any usual form or in any other form which the directors may approve and shall be executed by or on behalf of the transferor and, unlessthe share is fully paid, by or on behalf of the transferee.

24. The directors may refuse to register the transfer of a share which is not fully paid to a person of whom they do not approve and they may refuse to register the transfer of a share onwhich the company has a lien. They may also refuse to register a transfer unless:

(a) it is lodged at the office or at such other place as the directors may appoint and is accompanied by the certificate for the shares to which it relates and such other evidence as the directorsmay reasonably require to show the right of the transferor to make the transfer;

(b) it is in respect of only one class of shares; and

(c) it is in favour of not more than four transferees.

25. If the directors refuse to register a transfer of a share, they shall within two months after the date on which the transfer was lodged with the company send to the transferee notice of therefusal.

26. The registration of transfers of shares or of transfers of any class of shares may be suspended at such times and for such periods (not exceeding thirty days in any year) as the directorsmay determine.

27. No fee shall be charged for the registration of any instrument of transfer or other document relating to or affecting the title to any share.

28. The company shall be entitled to retain any instrument of transfer which is registered, but any instrument of transfer which the directors refuse to register shall be returned to the personlodging it when notice of the refusal is given.

TRANSMISSION OF SHARES

29. If a member dies the survivor or survivors where he was a joint holder, and his personal representatives where he was a sole holder or the only survivor of joint holders, shall be the onlypersons recognised by the company as having any title to his interest; but nothing herein contained shall release the estate of a deceased member from any liability in respect of any sharewhich had been jointly held by him.

30. A person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence being produced as the directors may properly require, electeither to become the holder of the share or to have some person nominated by him registered as the transferee. If he elects to become the holder he shall give notice to the companyto that effect. If he elects to have another person registered he shall execute an instrument of transfer of the share to that person. All the articles relating to the transfer of shares shallapply to the notice or instrument of transfer as if it were an instrument of transfer executed by the member and the death or bankruptcy of the member had not occurred.

31. A person becoming entitled to a share in consequence of the death or bankruptcy of a member shall have the rights to which he would be entitled if he were the holder of the share,except that he shall not, before being registered as the holder of the share, be entitled in respect of it to attend or vote at any meeting of the company or at any separate meeting of theholders of any class of shares in the company.

ALTERATION OF SHARE CAPITAL

32. The company may by ordinary resolution:

(a) increase its share capital by new shares of such amount as the resolution prescribes;

(b) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(c) subject to the provisions of the Act, sub-divide its shares, or any of them, into shares of smaller amount and the resolution may determine that, as between the shares resulting from thesub-division, any of them may have any preference or advantage as compared with the others; and

(d) cancel shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount ofthe shares so cancelled.

33. Whenever as a result of a consolidation of shares any members would become entitled to fractions of a share, the directors may, on behalf of those members, sell the shares representingthe fractions for the best price reasonably obtainable to any person (including, subject to the provisions of the Act, the company) and distribute the net proceeds of sale in due proportionamong those members, and the directors may authorise some person to execute an instrument of transfer of the shares to, or in accordance with the directions of, the purchaser. Thetransferee shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity in or invalidity of the proceedings in referenceto the sale.

34. Subject to the provisions of the Act, the company may by special resolution reduce its share capital, any capital redemption reserve and any share premium account in any way.

PURCHASE OF OWN SHARES

35. Subject to the provisions of the Act, the company may purchase its own shares (including any redeemable shares) and, if it is a private company, make a payment in respect of the redemptionor purchase of its own shares otherwise than out of distributable profits of the company or the proceeds of a fresh issue of shares.

GENERAL MEETINGS

36. All general meetings other than annual general meetings shall be called extraordinary general meetings.

37. The directors may call general meetings and, on the requisition of members pursuant to the provisions of the Act, shall forthwith proceed to convene an extraordinary general meetingfor a date not later than eight weeks after receipt of the requisition. If there are not within the United Kingdom sufficient directors to call a general meeting, any director or any memberof the company may call a general meeting.

NOTICE OF GENERAL MEETINGS

38. An annual general meeting and an extraordinary general meeting called for the passing of a special resolution or a resolution appointing a person as a director shall be called by at leasttwenty-one clear day�s notice. All other extraordinary general meetings shall be called by at least fourteen clear days� notice but a general meeting may be called by shorter notice if it isso agreed in the case of an annual general meeting, by all the entitled to attend and vote thereat; and in the case of any other meeting by a majority in number of the members havinga right to attend and vote being a majority together holding not less than ninety-five per cent in nominal value of the shares giving that right.

Appendix G | Table A

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Do-It-YourselfAppendix G | Table A

The notice shall specify the time and place of the meeting and the general nature of the business to be transacted and, in the case of an annual general meeting, shall specify the meetingas such.

Subject to the provisions of the articles and to any restrictions imposed on any shares, the notice shall be given to all the members, to all persons entitled to a share in consequence of thedeath or bankruptcy of a member and to the directors and auditors.

39. The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.

PROCEEDINGS AT GENERAL MEETINGS

40. No business shall be transacted at any meeting unless a quorum is present. Two persons entitled to vote upon the business to be transacted, each being a member or a proxy for a memberor a duly authorised representative of a corporation, shall be a quorum.

41. If such a quorum is not present within half an hour from the time appointed for the meeting, or if during a meeting such a quorum ceases to be present, the meeting shall stand adjournedto the same day in the next week at the same time and place or to such time and place as the directors may determine.

42. The chairman, if any, of the board of directors or in his absence some other director nominated by the directors shall preside as chairman of the meeting, but if neither the chairman norsuch other director (if any) be present within fifteen minutes after the time appointed for holding the meeting and willing to act, the directors present shall elect one of their number tobe chairman and, if there is only one director present and willing to act, he shall be chairman.

43. If no director is willing to act as chairman, or if no director is present within fifteen minutes after the time appointed for holding the meeting, the members present and entitled to voteshall choose one of their number to be chairman.

44. A director shall, notwithstanding that he is not a member, be entitled to attend and speak at any general meeting and at any separate meeting of the holders of any class of shares in thecompany.

45. The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place,but no business shall be transacted at an adjourned meeting other than business which might properly have been transacted at the meeting had the adjournment not taken place. Whena meeting is adjourned for fourteen days or more, at least seven clear days� notice shall be given specifying the time and place of the adjourned meeting and the general nature of the businessto be transacted. Otherwise it shall not be necessary to give any such notice.

46. A resolution put to the vote of a meeting shall be decided on a show of hands unless before, or on the declaration of the result of, the show of hands a poll is duly demanded. Subject tothe provisions of the Act, a poll may be demanded:

(a) by the chairman; or

(b) by at least two members having the right to vote at the meeting; or

(c) by a member or members representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

(d) by a member or members holding shares conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the totalsum paid up on all the shares conferring that right; and a demand by a person as proxy for a member shall be the same as a demand by the member.

47. Unless a poll is duly demanded a declaration by the chairman that a resolution has been carried or carried unanimously, or by a particular majority, or lost, or not carried by a particularmajority and an entry to that effect in the minutes of the meeting shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour ofor against the resolution.

48. The demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the chairman and a demand so withdrawn shall not be taken to have invalidated the resultof a show of hands declared before the demand was made.

49. A poll shall be taken as the chairman directs and he may appoint scrutineers (who need not be members) and fix a time and place for declaring the result of the poll. The result of thepoll shall be deemed to be the resolution of the meeting at which the poll was demanded.

50. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall be entitled to a casting vote in addition to any other vote he may have.

51. A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either forthwith or atsuch time and place as the chairman directs not being more than thirty days after the poll is demanded. The demand for a poll shall not prevent the continuance of a meeting for thetransaction of any business other than the question on which the poll is demanded. If a poll is demanded before the declaration of the result of a show of hands and the demand is dulywithdrawn, the meeting shall continue as if the demand had not been made.

52. No notice need be given of a poll not taken forthwith if the time and place at which it is to be taken are announced at the meeting at which it is demanded. In any other case at least sevenclear days� notice shall be given specifying the time and place at which the poll is to be taken.

53. A resolution in writing executed by or on behalf of each member who would have been entitled to vote upon it if it had been proposed at a general meeting at which he was present shallbe as effectual as if it had been passed at a general meeting duly convened and held and may consist of several instruments in the like form each executed by or on behalf of one or moremembers.

VOTES OF MEMBERS

54. Subject to any rights or restrictions attached to any shares, on a show of hands every member who (being an individual) is present in person or (being a corporation) is present by a dulyauthorised representative, not being himself a member entitled to vote, shall have one vote and on a poll every member shall have one vote for every share of which he is the holder.

55. In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and seniorityshall be determined by the order in which the names of the holders stand in the register of members.

56. A member in respect of whom an order has been made by any court having jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder may vote,whether on a show of hands or on a poll, by his receiver, curator bonis or other person authorised in that behalf appointed by that court, and any such receiver, curator bonis or otherperson may, on a poll, vote by proxy. Evidence to the satisfaction of the directors of the authority of the person claiming to exercise the right to vote shall be deposited at the office, orat such other place as is specified in accordance with the articles for the deposit of instruments of proxy, not less than 48 hours before the time appointed for holding the meeting oradjourned meeting at which the right to vote is to be exercised and in default the right to vote shall not be exercisable.

57. No member shall vote at any general meeting or at any separate meeting of the holders of any class of shares in the company, either in person or by proxy, in respect of any share heldby him unless all moneys presently payable by him in respect of that share have been paid.

58. No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is tendered, and every vote not disallowed at themeeting shall be valid. Any objection made in due time shall be referred to the chairman whose decision shall be final and conclusive.

59. On a poll votes may be given either personally or by proxy. A member may appoint more than one proxy to attend on the same occasion.

60. An instrument appointing a proxy shall be in writing, executed by or on behalf of the appointor and shall be in the following form (or in a form as near thereto as circumstances allowor in any other form which is usual or which the directors may approve):

�__________________________________________ PLC/Limited

I/We____________________________________________________________________________________________,

of _______________________________________________________________________________________________

being a member/members of the above-named company, hereby appoint ___________________________________________

of ______________________________________________________________________________________________,

or failing him/her, ___________________________________________________________________________________

of ______________________________________________________________________________________________,

as my/our proxy to vote in my/our name(s) and on my/our behalf at the annual/extraordinary general meeting of the company to be held on ______, and at any adjournment thereof.

Signed ________________________________ on ___________________________________________________.�

61. Where it is desired to afford members an opportunity of instructing the proxy how he shall act the instrument appointing a proxy shall be in the following form (or in a form as nearthereto as circumstances allow or in any other form which is usual or which the directors may approve):

�__________________________________________ PLC/Limited

I/We____________________________________________________________________________________________,

of ____________________________________________________________________________________________ being a member/members of the above-named company,

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hereby appoint ___________________________________________

of ______________________________________________________________________________________________,

or failing him/her, ___________________________________________________________________________________

of ______________________________________________________________________________________________,

as my/our proxy to vote in my/our name(s) and on my/our behalf at the annual/extraordinary general meeting of the company to be held on ______, and at any adjournment thereof.

This form is to be used in respect of the resolutions mentioned below as follows:

Resolution No. 1 *for *against

Resolution No. 2 *for *against.

*Strike out whichever is not desired.

Unless otherwise instructed, the proxy may vote as he thinks fit or abstain from voting.

Signed _________________________________ on ____________________________________________.�

62. The instrument appointing a proxy and any authority under which it is executed or a copy of such authority certified notarially or in some other way approved by the directors may:

(a) be deposited at the office or at such other place within the United Kingdom as is specified in the notice convening the meeting or in any instrument of proxy sent out by the companyin relation to the meeting not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or

(b) in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointedfor the taking of the poll; or

(c) where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded, be delivered at the meeting at which the poll was demanded to the chairman or to thesecretary or to any director; and an instrument of proxy which is not deposited or delivered in a manner so permitted shall be invalid.

63. A vote given or poll demanded by proxy or by the duly authorised representative of a corporation shall be valid notwithstanding the previous determination of the authority of the personvoting or demanding a poll unless notice of the determination was received by the company at the office or at such other place at which the instrument of proxy was duly deposited beforethe commencement of the meeting or adjourned meeting at which the vote is given or the poll demanded or (in the case of a poll taken otherwise than on the same day as the meetingor adjourned meeting) the time appointed for taking the poll.

NUMBER OF DIRECTORS

64. Unless otherwise determined by ordinary resolution, the number of directors (other than alternate directors) shall not be subject to any maximum but shall be not less than two.

ALTERNATE DIRECTORS

65. Any director (other than an alternate director) may appoint any other director, or any other person approved by resolution of the directors and willing to act, to be an alternate directorand may remove from office an alternate director so appointed by him.

66. An alternate director shall be entitled to receive notice of all meetings of directors and of all meetings of committees of directors of which his appointor is a member, to attend and voteat any such meeting at which the director appointing him is not personally present, and generally to perform all the functions of his appointor as a director in his absence but shall notbe entitled to receive any remuneration from the company for his services as an alternate director. But it shall not be necessary to give notice of such a meeting to an alternate directorwho is absent from the United Kingdom.

67. An alternate director shall cease to be an alternate director if his appointor ceases to be a director; but, if a director retires by rotation or otherwise but is re-appointed or deemed tohave been re-appointed at the meeting at which he retires, any appointment of an alternate director made by him which was in force immediately prior to his retirement shall continueafter his re-appointment.

68. Any appointment or removal of an alternate director shall be by notice to the company signed by the director making or revoking the appointment or in any other manner approvedby the directors.

69. Save as otherwise provided in the articles, an alternate director shall be deemed for all purposes to be a director and shall alone be responsible for his own acts and defaults and he shallnot be deemed to be the agent of the director appointing him.

POWERS OF DIRECTORS

70. Subject to the provisions of the Act, the memorandum and the articles and to any directions given by special resolution, the business of the company shall be managed by the directorswho may exercise all the powers of the company. No alteration of the memorandum or articles and no such direction shall invalidate any prior act of the directors which would have beenvalid if that alteration had not been made or that direction had not been given. The powers given by this regulation shall not be limited by any special power given to the directors bythe articles and a meeting of directors at which a quorum is present may exercise all powers exercisable by the directors.

71. The directors may, by power of attorney or otherwise, appoint any person to be the agent of the company for such purposes and on such conditions as they determine, including authorityfor the agent to delegate all or any of his powers.

DELEGATION OF DIRECTORS’ POWERS

72. The directors may delegate any of their powers to any committee consisting of one or more directors. They may also delegate to any managing director or any director holding any otherexecutive office such of their powers as they consider desirable to be exercised by him. Any such delegation may be made subject to any conditions the directors may impose, and eithercollaterally with or to the exclusion of their own powers and may be revoked or altered. Subject to any such conditions, the proceedings of a committee with two or more members shallbe governed by the articles regulating the proceedings of directors so far as they are capable of applying.

APPOINTMENT AND RETIREMENT OF DIRECTORS

73. At the first annual general meeting all the directors shall retire from office, and at every subsequent annual general meeting one-third of the directors who are subject to retirement byrotation or, if their number is not three or a multiple of three, the number nearest to one-third shall retire from office; but, if there is only one director who is subject to retirement byrotation, he shall retire.

74. Subject to the provisions of the Act, the directors to retire by rotation shall be those who have been longest in office since their last appointment or re-appointment, but as between personswho became or were last re-appointed directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot.

75. If the company, at the meeting at which a director retires by rotation, does not fill the vacancy the retiring director shall, if willing to act, be deemed to have been re-appointed unless atthe meeting it is not to fill the vacancy or unless a resolution for the re-appointment of the director is put to the meeting and lost.

76. No person other than a director retiring by rotation shall be appointed or re-appointed a director at any general meeting unless:

(a) he is recommended by the directors; or

(b) not less than fourteen nor more than thirty-five clear days before the date appointed for the meeting, notice executed by a member qualified to vote at the meeting has been given tothe company of the intention to propose that person for appointment or re-appointment stating the particulars which would, if he were so appointed or re-appointed, be required tobe included in the company�s register of directors together with notice executed by that person of his willingness to be appointed or re-appointed.

77. Not less than seven nor more than twenty-eight clear days before the date appointed for holding a general meeting notice shall be given to all who are entitled to receive notice of themeeting of any person (other than a director retiring by rotation at the meeting) who is recommended by the directors for appointment or re-appointment as a director at the meetingor in respect of whom notice has been duly given to the company of the intention to propose him at the meeting for appointment or re-appointment as a director. The notice shall givethe particulars of that person which would, if he were so appointed or re-appointed, be required to be included in the company�s register of directors.

78. Subject as aforesaid, the company may by ordinary resolution appoint a person who is willing to act to be a director either to fill a vacancy or as an additional director and may alsodetermine the rotation in which any additional directors are to retire.

79. The directors may appoint a person who is willing to act to be a director, either to fill a vacancy or as an additional director, provided that the appointment does not cause the numberof directors to exceed any number fixed by or in accordance with the articles as the maximum number of directors. A director so appointed shall hold office only until the next followingannual general meeting and shall not be taken into account in determining the directors who are to retire by rotation at the meeting. If not re-appointed at such annual general meeting,he shall vacate office at the conclusion thereof.

80. Subject as aforesaid, a director who retires at an annual general meeting may, if willing to act, be re-appointed. If he is not re-appointed, he shall retain office until the meeting appointssomeone in his place, or if it does not do so, until the end of the meeting.

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DISQUALIFICATION AND REMOVAL OF DIRECTORS

81. The office of a director shall be vacated if:

(a) he ceases to be a director by virtue of any provision of the Act or he becomes prohibited by law from being a director; or

(b) he becomes bankrupt or makes any arrangement or composition with his creditors generally; or

(c) he is, or may be, suffering from mental disorder and either:

(i) he is admitted to hospital in pursuance of an application for admission for treatment under the Mental Health Act 1983 or, in Scotland, an application for admission under the MentalHealth (Scotland) Act 1960, or

(ii) an order is made by a court having jurisdiction (whether in the United Kingdom or elsewhere)in matters concerning mental disorder for his detention or for the appointment of a receiver,curator bonis or other person to exercise powers with respect to his property or affairs; or

(d) he resigns his office by notice to the company; or

(e) he shall for more than six consecutive months have been absent without permission of the directors from meetings of directors held during that period and the directors resolve thathis office be vacated.

REMUNERATION OF DIRECTORS

82. The directors shall be entitled to such remuneration as the company may by ordinary resolution determine and, unless the resolution provides otherwise, the remuneration shall be deemedto accrue from day to day.

DIRECTORS’ EXPENSES

83. The directors may be paid all travelling, hotel, and other expenses properly incurred by them in connection with their attendance at meetings of directors or committees of directors orgeneral meetings or separate meetings of the holders of any class of shares or of debentures of the company or otherwise in connection with the discharge of their duties.

DIRECTORS’ A PPOINTMENTS AND INTERESTS

84. Subject to the provisions of the Act, the directors may appoint one or more of their number to the office of managing director or to any other executive office under the company andmay enter into an agreement or arrangement with any director for his employment by the company or for the provision by him of any services outside the scope of the ordinary dutiesof a director. Any such appointment, agreement or arrangement may be made upon such terms as the directors determine and they may remunerate any such director for his servicesas they think fit. Any appointment of a director to an executive office shall terminate if he ceases to be a director but without prejudice to any claim to damages for breach of the contractof service between the director and the company. A managing director and a director holding any other executive office shall not be subject to retirement by rotation.

85. Subject to the provisions of the Act, and provided that he has disclosed to the directors the nature and extent of any material interest of his, a director notwithstanding his office:

(a) may be a party to, or otherwise interested in, any transaction or arrangement with the company or in which the company is otherwise interested;

(b) may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the company orin which the company is otherwise interested; and

(c) shall not, by reason of his office, be accountable to the company for any benefit which he derives from any such office or employment or from any such transaction or arrangement orfrom any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit.

86. For the purposes of regulation 85:

(a) a general notice given to the directors that a director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in whicha specified person or class of persons is interested shall be deemed to be a disclosure that the director has an interest in any such transaction of the nature and extent so specified; and

(b) an interest of which a director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interest of his.

DIRECTORS’ GRATUITIES AND PENSIONS

87. The directors may provide benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any director who has held but no longer holds any executive officeor employment with the company or with any body corporate which is or has been a subsidiary of the company or a predecessor in business of the company or of any such subsidiary,and for any member of his family (including a spouse and a former spouse) or any person who is or was dependent on him, and may (as well before as after he ceases to hold such officeor employment) contribute to any fund and pay premiums for the purchase or provision of any such benefit.

PROCEEDINGS OF DIRECTORS

88. Subject to the provisions of the articles, the directors may regulate their proceedings as they think fit. A director may, and the secretary at the request of a director shall, call a meetingof the directors. It shall not be necessary to give notice of a meeting to a director who is absent from the United Kingdom. Questions arising at a meeting shall be decided by a majorityof votes. In the case of an equality of votes, the chairman shall have a second or casting vote. A director who is also an alternate director shall be entitled in the absence of his appointorto a separate vote on behalf of his appointor in addition to his own vote.

89. The quorum for the transaction of the business of the directors may be fixed by the directors and unless so fixed at any other number shall be two. A person who holds office only asan alternate director shall, if his appointor is not present, be counted in the quorum.

90. The continuing directors or a sole continuing director may act notwithstanding any vacancies in their number but, if the number of directors is less than the number fixed as the quorum,the continuing directors or director may act only for the purpose of filling vacancies or of calling a general meeting.

91. The directors may appoint one of their number to be the chairman of the board of directors and may at any time remove him from that office. Unless he is unwilling to do so, the directorso appointed shall preside at every meeting of directors at which he is present. But if there is no director holding that office, or if the director holding it is unwilling to preside or is notpresent within five minutes after the time appointed for the meeting, the directors present may appoint one of their number to be chairman of the meeting.

92. All acts done by a meeting of directors, or of a committee of directors, or by a person acting as a director shall, notwithstanding that it be afterwards discovered that there was a defectin the appointment of any director or that any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as valid as if every such person hadbeen duly appointed and was qualified and had continued to be a director and had been entitled to vote.

93. A resolution in writing signed by all the directors entitled to receive notice of a meeting of directors or of a committee of directors shall be as valid and effectual as if it had been passedat a meeting of directors or (as the case may be) a committee of directors duly convened and held and may consist of several documents in the like form each signed by one or moredirectors; but a resolution signed by an alternate director need not also be signed by his appointor and, if it is signed by a director who has appointed an alternate director, it need notbe signed by the alternate director in that capacity.

94. Save as otherwise provided by the articles, a director shall not vote at a meeting of directors or of a committee of directors on any resolution concerning a matter in which he has, directlyor indirectly, an interest or duty which is material and which conflicts or may conflict with the interests of the company unless his interest or duty arises only because the case falls withinone or more of the following paragraphs:

(a) the resolution relates to the giving to him of a guarantee, security, or indemnity in respect of money lent to, or an obligation incurred by him for the benefit of, the company or any ofits subsidiaries;

(b) the resolution relates to the giving to a third party of a guarantee, security, or indemnity in respect of an obligation of the company or any of its subsidiaries for which the director hasassumed responsibility in whole or part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security;

(c) his interest arises by virtue of his subscribing or agreeing to subscribe for any shares, debentures or other securities of the company or any of its subsidiaries, or by virtue of his being,or intending to become, a participant in the underwriting or sub-underwriting of offer of any such shares, debentures, or other securities by the company or any of its subsidiaries forsubscription, purchase or exchange;

(d) the resolution relates in any way to a retirement benefits scheme which has been approved, or is conditional upon approval, by the Board of Inland Revenue for taxation purposes.

For the purposes of this regulation, an interest of a person who is, for any purpose of the Act (excluding any statutory modification thereof not in force when this regulation becomes bindingon the company), connected with a director shall be treated as an interest of the director and, in relation to an alternate director, an interest of his appointor shall be treated as an interestof the alternate director without prejudice to any interest which the alternate director has otherwise.

95. A director shall not be counted in the quorum present at a meeting in relation to a resolution on which he is not entitled to vote.

96. The company may by ordinary resolution suspend or relax to any extent, either generally or in respect of any particular matter, any provision of the articles prohibiting a director fromvoting at a meeting of directors or of a committee of directors.

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97. Where proposals are under consideration concerning the appointment of two or more directors to offices or employment with the company or any body corporate in which the companyis interested the proposals may be divided and considered in relation to each director separately and (provided he is not for another reason precluded from voting) each of the directorsconcerned shall be entitled to vote and be counted in the quorum in respect of each resolution except that concerning his own appointment.

98. If a question arises at a meeting of directors or of a committee of directors as to the right of a director to vote, the question may, before the conclusion of the meeting, be referred to thechairman of the meeting and his ruling in relation to any director other than himself shall be final and conclusive.

SECRETARY

99. Subject to the provisions of the Act, the secretary shall be appointed by the directors for such term, at such remuneration and upon such conditions as they may think fit; and any secretary

so appointed may be removed by them.

MINUTES

100. The directors shall cause minutes to be made in books kept for the purpose:

(a) of all appointments of officers made by the directors; and

(b) of all proceedings at meetings of the company, of the holders of any class of shares in the company, and of the directors, and of committees of directors, including the names of the directorspresent at each such meeting.

THE SEAL

101. The seal shall only be used by the authority of the directors or of a committee of directors authorised by the directors. The directors may determine who shall sign any instrument to whichthe seal is affixed and unless otherwise so determined it shall be signed by a director and by the secretary or by a second director.

DIVIDENDS

102. Subject to the provisions of the Act, the company may by ordinary resolution declare dividends in accordance with the respective rights of the members, but no dividend shall exceed theamount recommended by the directors.

103. Subject to the provisions of the Act, the directors may pay interim dividends if it appears to them that they are justified by the profits of the company available for distribution. If the sharecapital is divided into different classes, the directors may pay interim dividends on shares which confer deferred or non-preferred rights with regard to dividend as well as on shares whichconfer preferential rights with regard to dividend, but no interim dividend shall be paid on shares carrying deferred or non-preferred rights if, at the time of payment, any preferentialdividend is in arrear. The directors may also pay at intervals settled by them any dividend payable at a fixed rate if it appears to them that the profits available for distribution justify thepayment. Provided the directors act in good faith they shall not incur any liability to the holders of shares conferring preferred rights for any loss they may suffer by the lawful paymentof an interim dividend on any shares having deferred or non-preferred rights.

104. Except as otherwise provided by the rights attached to shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid. Alldividends shall be apportioned and paid proportionately to the amounts paid up on the shares during any portion or the period in respect of which the dividend is paid; but, if any shareis issued on terms providing that it shall rank for dividend as from a particular date, that share shall rank for dividend accordingly.

105. A general meeting declaring a dividend may, upon the recommendation of the directors, direct that it shall be satisfied wholly or partly by the distribution of assets and, where any difficultyarises in regard to the distribution, the directors may settle the same and in particular may issue fractional certificates and fix the value for distribution of any assets and may determinethat cash shall be paid to any member upon the footing of the value so fixed in order to adjust the rights of members and may vest any assets in trustees.

106. Any dividend or other moneys payable in respect of a share may be paid by cheque sent by post to the registered address of the person entitled or, if two or more persons are the holderof the share or are jointly entitled to it by reason of the death or bankruptcy of the holder, to the registered address of that one of those persons who is first named in the register ofmembers or to such person and to such address as the person or persons entitled may in writing direct. Every cheque shall be made payable to the order of the person or persons entitledor to such other person as the person or persons entitled may in writing direct and payment of the cheque shall be a good discharge to the company. Any joint holder or other personjointly entitled to a share as aforesaid may give receipts for any dividend or other moneys payable in respect of the share.

107. No dividend or other moneys payable in respect of a share shall bear interest against the company unless otherwise provided by the rights attached to the share.

108. Any dividend which has remained unclaimed for twelve years from the date when it became due for payment shall, if the directors so resolve, be forfeited and cease to remain owing bythe company.

ACCOUNTS

109. No member shall (as such) have any right of inspecting any accounting records or other book or document of the company except as conferred by statute or authorised by the directorsor by ordinary resolution of the company.

CAPITALISATION OF PROFITS

110. The directors may with the authority of an ordinary resolution of the company:

(a) subject as hereinafter provided, resolve to capitalise any undivided profits of the company not required for paying any preferential dividend (whether or not they are available fordistribution) or any sum standing to the credit of the company�s share premium account or capital redemption reserve;

(b) appropriate the sum resolved to be capitalised to the members who would have been entitled to it if it were distributed by way of dividend and in the same proportions and apply suchsum on their behalf either in or towards paying up the amounts, if any, for the time being unpaid on any shares held by them respectively, or in paying up in full unissued shares or debenturesof the company of a nominal amount equal to that sum, and allot the shares or debentures credited as fully paid to those members, or as they may direct, in those proportions, or partlyin one way and partly in the other: but the share premium account, the capital redemption reserve, and any profits which are not available for distribution may, for the purposes of thisregulation, only be applied in paying up unissued shares to be allotted to members credited as fully paid;

(c) make such provision by the issue of fractional certificates or by payment in cash or otherwise as they determine in the case of shares or debentures becoming distributable under thisregulation in fractions; and

(d) authorise any person to enter on behalf of all the members concerned into an agreement with the company providing for the allotment to them respectively, credited as fully paid, of anyshares or debentures to which they are entitled upon such capitalisation, any agreement made under such authority being binding on all such members.

NOTICES

111. Any notice to be given to or by any person pursuant to the articles shall be in writing except that a notice calling a meeting of the directors need not be in writing.

112. The company may give any notice to a member either personally or by sending it by post in a prepaid envelope addressed to the member at his registered address or by leaving it at thataddress. In the case of joint holders of a share, all notices shall be given to the joint holder whose name stands first in the register of members in respect of the joint holding and noticeso given shall be sufficient notice to all the joint holders. A member whose registered address is not within the United Kingdom and who gives to the company an address within the UnitedKingdom at which notices may be given to him shall be entitled to have notices given to him at the address, but otherwise no such member shall be entitled to receive any notice fromthe company.

113. A member present, either in person or by proxy, at any meeting of the company or of the holders of any class of shares in the company shall be deemed to have received notice of themeeting and, where requisite, of the purposes for which it was called.

114. Every person who becomes entitled to a share shall be bound by any notice in respect of that share which, before his name is entered into the register of members, has been duly givento a person from whom he derives his title.

115. Proof that an envelope containing a notice was properly addressed, prepaid and posted shall be conclusive evidence that the notice was given. A notice shall be deemed to be given at theexpiration of 48 hours after the envelope containing it was posted.

116. A notice may be given by the company to the persons entitled to a share in consequence of the death or bankruptcy of a member by sending or delivering it, in any manner authorisedby the articles for the giving of notice to a member, addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt or by any like descriptionat the address, if any, within the United Kingdom supplied for that purpose by the persons claiming to be so entitled. Until such an address has been supplied, a notice may be given in anymanner in which it might have been given if the death or bankruptcy had not occurred.

WINDING UP

117. If the company is wound up, the liquidator may, with the sanction of an extraordinary resolution of the company and any other sanction required by the Act, divide among the members

70



in specie the whole or any part of the assets of the company and may, for that purpose, value any assets and determine how the division shall be carried out as between the members ordifferent classes of members. The liquidator may, with the like sanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the members as he with thelike sanction determines, but no member shall be compelled to accept any assets upon which there is a liability.

INDEMNITY

118. Subject to the provisions of the Act but without prejudice to any indemnity to which a director may otherwise be entitled, every director or other officer or auditor of the company shallbe indemnified out of the assets of the company against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour orin which he is acquitted or in connection with any application in which relief is granted to him by the court from liability for negligence, default, breach of duty or breach of trust in relationto the affairs of the company.

71


Do-It-Yourself

HGlossary

Appendix H | Glossary

u GlossaryAccounting reference date (ARD). The ARD is

the financial year-end. It is also the date thatdetermines when accounts are due for deliveryto Companies House. Every company has an ARD.

Alternate director. A person appointed by adirector to act on his behalf in his absence.

Annual general meeting (AGM). An obligatoryannual meeting of the company�s shareholdersduring which the annual accounts, directors�and auditors� reports are examined, newdirectors are elected or existing directors re-elected, and other matters discussed. A companycan dispense with the need for an annual generalmeeting by passing an elective resolution to thateffect.

Annual return. A pre-printed form sent outannually by Companies House containing theparticulars of a company, its officers and itsshareholders, for verification by the companysecretary or director.

Annual accounts. A balance sheet and/or profit andloss account detailing the company�s financialsituation at the accounting reference date. Must besigned by a director, and must be delivered toCompanies House on time.

Articles of Association. One of two legaldocuments required to form a company, theArticles of Association contains the company�srules and regulations governing its internalmanagement

Asset. An item of value owned. A company canown items, for example, computer equipment,and these are considered its assets.

Auditors. A person or financial institutionappointed to examine and verify accounts. Mostsmall Companies are exempt from audit,providing they have a turnover less than £1million and a balance sheet totalling less than £1.4million

Authorised share capital. The maximum, butnot the minimum, number of shares a companycan issue, stated in its Memorandum ofAssociation.

Board. A quorum of the company�s directorsacting together to determine and carry outcompany policy

Board meeting. A meeting of the company�sdirectors

Casting vote. A deciding vote cast by thechairman to break a tie.

Chairman. A director of the company whopresides over a meeting.

Companies House. The government body set upto deal with the administration of companies inthe UK.

Corporation. A body formed and authorised bylaw to act as a single person although constitutedby one or more persons and legally endowedwith various rights and duties including thecapacity of succession. A limited company is atype of corporation

Director. One of two officers legally required by acompany, the director is responsible for the day-to-day running of the company, as well asensuring that the company�s annual accounts andannual returns are filed with Companies House everyyear.

Elective resolution. A type of resolution thatrequires the unanimous agreement of all theshareholders, and is used for five specific purposeswhich relate to the removal or reduction ofadministrative or formal requirements, such as theneed to hold an annual general meeting.

Extraordinary resolution. A type of resolutionwhich requires a majority of not less than 75%

General meeting. A meeting between theshareholders of a company. It may be either anannual general meeting or an extraordinary generalmeeting.

Incorporation. The process of becoming acorporation by following the proceduresdescribed by law.

Insolvency. The inability of a company to pay itsdebts as they fall due.

Issued share capital. The portion of shares thathave been issued by a company to itsshareholders.

Member. A shareholder.

Memorandum of Association. One of two legaldocuments required to form a company.

Minutes. A written record detailing the proceedingsof a shareholders or directors meeting.

Objects. A company�s objectives: for example, tomake a profit by selling books.

Officers. The directors and secretariesof thecompany.

Poll. Counting the votes of shareholders accordingto the number of shares they hold in thecompany: for example, a shareholder with 50shares would have 50 votes, wherease ashareholder with only 10 shares would have 10votes.

Proxy. A person authorised by a shareholder tovote at a meeting on behalf of him or her.

Pre-emption right. The right of existingshareholders of a company to be offered firstrefusal of new shares which are to be issued (orexisting shares to be transferred from another

shareholder), in direct proportion to theirpresent shareholding to prevent thepossibility of an �outsider� gaining acontrolling interest. For example, if acompany has two shareholders, one whoowns 30 shares, and other who owns 70shares, and it is decided that 200 newshares are to be allotted, then the firstshareholder would be offered the chanceto buy 60 of those shares, and the secondshareholder would be offered 140 of thoseshares, before the shares were offered forsale to anyone outside the company. Mostcompanies have a pre-emption right as partof the rules contained within their Articlesof Association.

Quorum. The minimum number of directorsor shareholders that must be present at ameeting before it can begin

Registered Office. An address where allstatutory documents relating to thecompany will be sent.

Remuneration. Payment for services. Forexample, director�s remuneration.

Resolution. An agreement or decision madeby the directors or shareholders voting at ameeting or in writing. If a majority vote isobtained, the resolution is passed and thecompany is bound by it. There are severalmain types of resolution:

Share certificate. A certificate issued to ashareholder upon the purchase of shares

Special resolution. A resolution whichrequires a majority of not less than 75%before it can be passed. Normal resolutionsusually only require a majority of more than50%.

Subscriber(s). The first shareholder(s) inthe company, who sign (or subscribe to)the company�s Memorandum of Associationon incorporation.

Turnover. The total sales of a company overa certain period. For example, if a companysold 1,000 books at £5 each during afinancial year its turnover would be £5000.

Unlimited liability. Means that in the caseof a sole trader, the owner can be declaredbankrupt and his/her personal possessionsmay be taken and sold to pay off the debtsof the business. Similarly, all partners can beheld responsible for the debts of thepartnership.

Written resolution. A resolution on papersigned by all the shareholders or all thedirectors of a company without the needfor a meeting

72


Do-It-Yourself

Useful ContactsI

Appendix I | Useful Contacts

u Useful Contacts

Companies HouseFor companies registered in England & Wales:

Crown Way,

Cardiff,

CF14 3UZ

Tel: 0870 3333636

Fax: 029 20380900

Web: http://www.companies-house.org.uk

For companies registered in Scotland:

37 Castle Terrace,

Edinburgh,

EH1 2EB

Tel: 0870 3333636

Fax: 0131 535 5820

Web: http://www.companies-house.org.uk

HM Customs and Excise

For companies registered in England & Wales:

King�s Beam House

39-41 Mark Lane,

London,

EC3R 7HE

Tel: 020 7626 1515

For companies registered in Scotland:

Caledonian House,

Greenmarket,

Dundee

DD1 1HD

Tel: 01382 200 822

Inland Revenue

Find your local tax office and a wealth of information at the Inland Revenue�s Web site

Web: http://www.inlandrevenue.gov.uk

73


Do-It-Yourself

TemplateMemorandum &Articles ofAssociation

J

Appendix J | Template Memorandum and Articles of Association


MEMORANDUM OF ASSOCIATION OF

______________________________________________________ LIMITED

* * *

1. The Company�s name is ________________________________________________________ LIMITED

2. The registered office of the Company will be situated in ____________________________________________

3. The objects for which the Company is established are:

A)To carry on, in conjunction with each other or as separate and distinct undertakings, all or any of the followingbusinesses namely:

a general commercial company;

manufacturers, importers, exporters, agents, dealers (both wholesale and retail) in all articles of commercial,manufacturing, personal and household use and consumption and in all kinds of raw materials; warehousemen,storage contractors, shipping and forwarding agents; dealers in property and estates, property developers, propertymanagers, investors in property; estate agents, insurance agents and brokers, accountants, financiers, financialagents and to act as nominee, trustee, agent, factor, broker, executor, administrator receiver for or otherwise onbehalf of Companies, Corporations, firms or persons, builders; scaffolders; contractors; heating and ventilationengineers and contractors; refrigeration engineers, specialists and contractors; decorators; painters; bricklayers,carpenters; shuttering manufacturers and erectors; joiners; public works contractors; plasterers, plumbers,electricians, shop front fitters; builders� and decorators� merchants; civil, mechanical, constructional, agricultural,consulting, heating, electrical and general engineers; welders; sheet metal workers; blacksmiths, motor engineers;garage proprietors; car hire service, taxi proprietors and operators, travel agents, tour operators, proprietors ofvehicles and vessels of all kinds, transport and haulage contractors; general engineers; tool makers; bookingagents for, and managers of theatres, cinemas and all other kinds of entertainments and sporting events; turf andsporting accountants in all their branches, proprietors of shops, cafes, clubs, hotels and restaurants, cateringcontractors; dealers in foods and provisions of all kinds; wine and spirit merchants; butchers; grocers, greengrocers;fishmongers and poultry merchants, farmers; florists, horticulturists; bakers; confectioners, tobacconists;ironmongers, hardware merchants; dealers in plastics of all kinds, antique dealers; furniture manufacturers anddealers; leather and fancy goods dealers; jewellers, radio television and electrical retailers, dealers and repairers,toys games and sports equipment dealers; photographers and dealers in all kinds of photographic material andequipment, film producers and distributors; textile merchants, tailors, fashion designers, ladies and gentlemen�soutfitters, boot and shoe retailers, perfumery and cosmetic dealers, hairdressers; manufacturing and retail chemists,printers, publishers, stationers, advertising and publicity agents, public relation specialists, consultants, businesstransfer agents and employment agents, computer operators, programmers and dealers; market research specialists,business advisers, mail order specialists; dyers and cleaners, dry cleaners, proprietors of launderettes, excavationand demolition contractors; provision of security services, plant hirers, scrap iron and waste merchants and tocarry on all or any of the said businesses, and provide services in connection therewith, either together as onebusiness or as separate and distinct businesses, in any part of the world.

B) To carry on any other business which in the opinion of the Directors of the Company may seem capable ofbeing conveniently carried out in connection with or as ancillary to any of the above businesses or to becalculated directly or indirectly to enhance the value of or render profitable any of the property of the Companyor to further any of its objects.

C) To build, construct, maintain, alter enlarge, pull down, remove or replace any buildings, works, plant, and machinerynecessary or convenient for the business of the Company or to join with any person, firm or company in doingany of the things aforesaid.

MEMORANDUM OF ASSOCIATION

LIMITED

D) To purchase, take on lease, exchange, hire or otherwise acquire for any estate or interest any real or personalproperty and any rights or privileges which the Company may think necessary or convenient for the purposesof its business.

E) To borrow or raise money upon such terms and on such security as may be considered expedient and inparticular by the issue or deposit of debentures or debenture stock (whether perpetual or not) and to securethe repayment of any money borrowed, raised or owing by mortgage charge or lien upon the whole or anypart of the undertaking property and assets of the Company, both present and future, including its uncalledcapital.

F) To apply for, purchase or otherwise acquire any patents, licences and the like, conferring any exclusive or non-exclusive or limited right of use or any secret or other information as to any invention which may seemcapable of being used for any of the purposes of the Company or the acquisition of which may seem calculateddirectly or indirectly to benefit the Company, and to use, exercise, develop, grant licences in respect of, orotherwise turn to account any rights and information so acquired.

G) To purchase, subscribe for or otherwise acquire and hold and deal with any shares, stocks or securities of anyother company having objects wholly or in part similar to the objects of the Company or carry on any businesscapable of being conducted so as directly or indirectly to benefit the Company.

H) To issue, place, underwrite, or guarantee the subscription of, or concur or assist in the issuing or placing,underwriting, or guaranteeing the subscription of shares, debentures, debenture stock, bonds, stocks, and securitiesof any company, whether limited or unlimited or incorporated by Act of Parliament or otherwise, at such timesand upon such terms and conditions as to remuneration and otherwise as may be agreed upon.

I) To invest and deal with monies of the Company not immediately required for the purposes of its business inor upon such investments and securities and in such manner as may from time to time be considered expedientand to dispose of or vary any such investments or securities.

J) To lend money or give credit to such persons, firms or companies and on such terms as may be consideredexpedient and to receive money on deposit or loan from and give guarantees or become security for anypersons, firms and companies and to charge any properties or property of the Company in support of anyguarantee or to secure the debts or obligations, contracts or engagements of any other company or person.

K) To enter into any arrangement with any Government or other authority, supreme, municipal, local or otherwise,and to obtain from any such Government or authority all rights, concessions, and privileges which may seemconducive to the Company�s objects or any of them, or to obtain or to endeavour to obtain, any provisionalorder of the Board of Trade, or any Act or Acts of Parliament for the purposes of the Company or any othercompany.

L) To enter into partnership or into any arrangement for sharing profits or to amalgamate with any person, firmor company carrying on or proposing to carry on any business which the Company is authorised to carry onor any business or transaction capable of being conducted so as directly or indirectly to benefit the Company.

M)To establish or support or aid in the establishment and support of associations, institutions, clubs, funds, trusts,and schemes calculateto benefit the officers, ex-officers, employees or ex-employees of the Company or ofany subsidiary, allied or associated company or the families, dependants or connections of such persons, and togrant pensions, gratuities and allowances and to make payments towards insurance, and to subscribe or guaranteemoney for charitable or benevolent objects or for any exhibition or for any public, general or useful objects.

N)To sell, exchange, lease, dispose of, turn to account or otherwise deal with the whole or any part of the undertakingof the Company for such consideration as may be considered expedient and in particular for shares, stock orsecurities of any other company formed or to be formed.

O)To promote, finance or assist any other company for the purpose of acquiring all or any part of the propertyrights and liabilities of the Company or for any other purpose which may seem directly or indirectly calculatedto benefit the Company.

P) To pay all or any of the preliminary expenses of the Company and of any company formed or promoted by theCompany.

Q)To remunerate any person, firm or company rendering services to the company in such manner as may bethought expedient.

R) To draw, accept, endorse, negotiate, execute and issue promissory notes, bills of exchange, scrip, warrants andother transferable or negotiable instruments.

S) To distribute among the Members in specie any property of the Company, or any proceeds of sale or dispositionof any property of the Company, and for such purpose to distinguish and separate capital from profits, but sothat no distribution amounting to a reduction of capital be made except with the sanction, (if any) for the timebeing required by law.

T) To purchase or otherwise acquire all or any part of the business or assets of any person, firm or company,carrying on or formed to carry on any business, and to pay cash or to issue any shares, stocks, debentures ordebenture stock of this Company as the consideration for such purchase of acquisition and to underake anyliabilities or obligations, relating to the business or property so purchase or acquired.

U) To do all or any of the above things in any part of the world either alone or in conjunction with others andeither as principals, agents, contractors, trustees or otherwise and either by or through agents, sub-contractors,trustees or otherwise.

V) To do all such other things as may be deemd incidental or conducive to the attainment of the above objects orany of them.

4. The liability of the members is limited

5. The share capital of the Company is £__________________ divided into _________________ shares of£_______________ each

6. The shares in the original or any increased capital of the Company may be issued with such prefered, deferredor other special rights or restrictions, whether in regard to dividend, voting return of capital or otherwise asthe Company may from time to time determine. The rights and privileges attached to any of the shares of theCompany may be modified, varied, abrogated or dealt with in accordance with the provisions for the time beingof the Company�s Articles of Association.

I, the person whose name and address is subscribed, am desirous of being formed into a Company, in pursuanceof this Memorandum of Association, and I agree to take the number of shares in the capital of the Company asset opposite my name.

NAME AND ADDRESS OF SUBSCRIBERS NO. OF SHARES TAKEN BY THE SUBSCRIBERS (IN WORDS)

____________________________________

____________________________________ ____________________________

____________________________________

____________________________________

____________________________________

____________________________________

____________________________________ ____________________________

____________________________________

____________________________________

____________________________________

____________________________________

____________________________________ ____________________________

____________________________________

____________________________________

____________________________________

NAME AND ADDRESS OF SUBSCRIBERS CONTINUED NO. OF SHARES TAKEN BY THE SUBSCRIBERS (IN WORDS)

____________________________________

____________________________________ ____________________________

____________________________________

____________________________________

____________________________________

____________________________________

____________________________________ ____________________________

____________________________________

____________________________________

____________________________________

____________________________________

____________________________________ ____________________________

____________________________________

____________________________________

____________________________________

Dated this day ______________________________


____________________________________

____________________________________

____________________________________

____________________________________

______________________________________________


ARTICLES OF ASSOCIATION OF

______________________________________________________________________________ LIMITED

* * *

Preliminary

1. The Company shall be a private company within the meaning of the Companies Act, 1985 (hereinafter referred toas �the Act�) and subject as hereinafter provided by the regulations contained in The Companies (Tables A to F)Regulations 1985 as in force at the date of incorporation of the Company. Such regulations (hereinafter referredto as �Table A�) shall apply to the Company.

2. Regulations 60, 61, 64, 73, 74, 75, 81(e), 89, 94, 95, 96, 97 and 98 of Table A shall not apply to the Company but theArticles hereinafter contained together with the remaining regulations of Table A, subject to the modificationshereinafter expressed, shall constitute the regulations of the Company.

General Meetings

3. In every notice calling a General Meeting of the Company there shall prominently appear a statement that amember who is entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of thatmember and that the proxy need not be a member of the Company. Every notice calling a General Meeting of theCompany shall also be sent to the current Auditors of the Company.

4. One member may constitute a quorum where the Company is a single member company.

Auditors

5. The appointment of an auditor shall be subject to the regulations concerning exemption from such an appointmentwhere the relevant criteria as defined by the Act are met.

Share Capital

6. The Company is a private company limited by shares, within the meaning of the Act.

7. The directors of the Company are authorised during the period of five years from the date of incorporation ofthe Company to allot or grant options over shares of the company to such persons at such times and on suchconditions as they think fit, up to a maximum aggregate nominal amount of such shares of £____________________,subject to the provisions of Articles 8 and 9 hereof and provided that no share shall be issued at a discount.

8. Subject to any direction to the contrary that may be given by the Company in general meeting, any original sharesfor the time being unissued and any new shares from time to time to be created, shall, before they are issued, beoffered to the members in proportion as nearly as possible to the nominal value of the existing shares held bythem and such offer shall be made by notice specifying the number of shares to which the member is entitled andlimiting a time within which the offer if not accepted shall be deemed declined, and after the expiration of suchtime or on receipt of an intimation from the member to whom the notice is given that he declines to accept theshares, the directors may dispose of the same in such manner as they think most beneficial to the Company. Theprovisions of section 89 of the Act shall have effect only insofar as they are not inconsistent with this Article.

9. A member desiring to transfer shares otherwise than to a person who is already a member of the Company shallgive notice in writing of such intention to the Directors of the Company giving particulars of the share in question.The directors as agents for the member giving such notice may dispose of such shares or any of them to membersof the Company at a price to be agreed between the transferor and the Directors, or failing agreement, at a pricefixed by the Auditors of the Company as the fair value thereof. If within twenty-eight days from the said notice theDirectors are unable to find a member or members willing to purchase all such shares, the transferor may disposeof so many of such shares as shall remain undisposed of in any manner he may think fit within three months fromthe date of the said notice. Where the Company has no auditor an individual or body eligible for appointment as

ARTICLES OF ASSOCIATION

LIMITED

an auditor as per the Companies Act shall be chosen to fix the price.

Appointment of Directors

10.The first director or directors of the Company shall be determined in writing by the subscriber(s) to theMemorandum of Association, pursuant to section 10 of the Act.

11.Unless otherwise determined by ordinary resolution, the numbers of directors (other than alternate directors)shall not be subject to any maximum, but shall be not less than one.

12.A person may be appointed a director of the Company notwithstanding that he has attained the age of seventyyears and no directors shall be liable to vacate the office by reason only of his having attained that age or any otherage.

Proceedings of Directors

13.A director may vote as a director in regard to any contract or arrangement in which he is interested or upon anymatter arising thereout, and if he shall so vote, his vote shall be counted and he shall be reckoned in estimating aquorum when any such contract or arrangement is under consideration.

14.The necessary quorum for the transaction of the business of the directors may be fixed by them and unless sofixed, shall be two, except when one director is in office. A person who holds office only as an alternate directorshall, if his appointer is not present, be counted in the quorum.

15.The directors may exercise all of the powers mentioned in the Memorandum of Association part 3.

Secretary

16.The first secretary of the Company shall be determined in writing by the subscriber(s) to the Memorandum ofAssociation, pursuant to Section 10 of the Act.

Seal

17. In accordance with the provisions of the Act the Company need not have a seal. If it does have a seal Regulation101 of Table A shall apply.

Signatures, names and addresses of subscribers

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

______________________________________________

______________________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

______________________________________________

______________________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

______________________________________________

______________________________________________

Signatures, names and addresses of subscribers continued

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

______________________________________________

______________________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

______________________________________________

______________________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

____________________________________ ____________________________________

______________________________________________

______________________________________________

Dated this day ______________________________


____________________________________

____________________________________

____________________________________

____________________________________

______________________________________________

81


Do-It-Yourself

FormsK

Appendix K | Forms

12Declaration on application for registration

do solemnly and sincerely declare that I am a [Solicitor engaged in theformation of the company] [person named as director or secretary of thecompany in the statement delivered to the Registrar under section 10 ofthe Companies Act 1985] and that all the requirements of the CompaniesAct 1985 in respect of the registration of the above company and ofmatters precedent and incidental to it have been complied with.

And I make this solemn Declaration conscientiously believing the same tobe true and by virtue of the Statutory Declarations Act 1835.

Please give the name, address,telephone number and, if available,a DX number and Exchange ofthe person Companies House shouldcontact if there is any query.

When you have completed and signed the form please send it to theRegistrar of Companies at:Comp anies House, Crown W ay, Cardiff, CF14 3UZ DX 33050 Cardifffor companies registered in England and WalesorComp anies House, 37 Castle T errace, Edinburgh, EH1 2EBfor companies registered in Scotland DX 235 Edinburgh


Form revised June 1998


Please complete in typescript,or in bold black capitals.

CHFP138

Declarant’ s signature

Declared at

Day Month Year

On

before me

Signed Date

A Commissioner for Oaths or Notary Public or Justice of the Peace or Solicitor

I,

of

Please delete as appropriate.

Please print name.11

Tel


�

10Please complete in typescript,or in bold black capitals.CHFP138

First directors and secretary and intended situation ofregistered office


When you have completed and signed the form please send it to theRegistrar of Companies at:Companies House, Crown Way, Cardiff, CF14 3UZ DX 33050 Cardifffor companies registered in England and WalesorCompanies House, 37 Castle Terrace, Edinburgh, EH1 2EBfor companies registered in Scotland DX 235 Edinburgh

Tel


Please give the name, address,telephone number and, if available,a DX number and Exchange ofthe person Companies House shouldcontact if there is any query.



Notes on completion appear on final page

Number of continuation sheets attached

If the memorandum is delivered by an agentfor the subscriber(s) of the memorandummark the box opposite and give the agent’sname and address.

Proposed Registered Office

(PO Box numbers only, are not acceptable)

Post town

PostcodeCounty / Region

Agent’s Name

Address

Post town

County / Region Postcode

�

Company name

*Style / Title

Forename(s)

Surname


Previous surname(s)

*Honours etc

* Voluntary details

*Style / Title

Forename(s)

Surname


Previous surname(s)

*Honours etc

Consent signature Date

Post town

Postcode

Country

County / Region

I consent to act as secretary of the company named on page 1

Post town

Postcode

Country

County / Region

Day Month Year



Company Secretary

Directors

NAME

Address

NAME

Address

NationalityDate of birth

Business occupation

Other directorships


(see notes 1-5)

(see notes 1-5)


Please list directors in alphabetical order

*Style / Title

Forename(s)

Surname


Previous surname(s)

*Honours etc

* Voluntary details

Post town

Postcode

Country

County / Region

Directors

NAME

Address


(see notes 1-5)

Day Month Year




Business occupation

Other directorships

Signed

Signed

Signed

Signed

Signed

Signed

Signed

Date

Date

Date

Date

Date

Date

Date

This section must be signed byEitheran agent on behalfof all subscribers

Or the subscribers

( i.e. those who signed as members on the memorandum of association).

(continued)

Notes

1. Show for an individual the fullforename(s) NOT INITIALS andsurname together with anyprevious forename(s) orsurname(s).

If the director or secretary is acorporation or Scottish firm -show the corporate or firm nameon the surname line.

Give previous forename(s) orsurname(s) except that:

- for a married woman, thename by which she wasknown before marriage neednot be give,

- names not used since theage of 18 or for at least 20years need not be given.

A peer, or an individual known bya title, may state the title insteadof or in addition to theforename(s) and surname andneed not give the name by whichthat person was known before heor she adopted the title orsucceeded to it.

Address:

Give the usual residentialaddress.

In the case of a corporation orScottish firm give the registeredor principal office.

Subscribers:

The form must be signedpersonally either by thesubscriber(s) or by a person orpersons authorised to sign onbehalf of the subscriber(s).

2. Directors known by anotherdescription:

- A director includes anyperson who occupies thatposition even if called by adifferent name, for example,governor, member ofcouncil.

3. Directors details:

- Show for each individualdirector the director’s dateof birth, businessoccupation and nationality.The date of birth must begiven for everyindividual director.

4. Other directorships:

- Give the name of everycompany of which theperson concerned is adirector or has been adirector at any time in thepast 5 years. You mayexclude a company whicheither is or at all timesduring the past 5 years,when the person was adirector, was:

- dormant

- a parent company whichwholly owned the companymaking the return,

- a wholly owned subsidiaryof the company making thereturn, or

- another wholly ownedsubsidiary of the sameparent company.

If there is insufficient space onthe form for other directorshipsyou may use a seperate sheetof paper, which should includethe company’s number and thefull name of the director.

5. Use Form 10 continuation sheetsor photocopies of page 2 to providedetails of joint secretaries oradditional directors.

88(2)Please complete in typescript,orin bold black capitals.CHFP138

Return of Allotment of Shares

Day Month Year Day Month Year

From To

Company Number

Company name in full

Shares alloted (including bonus shares):

When you have completed and signed the form send it tothe Registrar of Companies at:

Companies House, Crown Way, Cardiff CF14 3UZ DX 33050 CardiffFor companies registered in England and Wales

Companies House, 37 Castle Terrace, Edinburgh EH1 2EB DX 235For companies registered in Scotland Edinburgh


If the allotted shares are fully or partly paid up otherwise than in cash please state:

Form revised January 2000

Date or period during whichshares were allotted(If shares were allotted on one dateenter that date in the “from” box)

Class of shares(ordinary or preference etc)

Number allotted

Nominal value of each share

Amount (if any) paid or due on eachshare (including any share premium)

% that each share is to betreated as paid up

Consideration for whichthe shares were allotted(This information must be supported bythe duly stamped contract or by the dulystamped particulars on Form 88(3) if thecontract is not in writing)

List the names and addresses of the allottees and the number of shares allotted to each overleaf

�

Names and addresses of the allottees (List joint share allotments consecutively)

Shareholder details Shares and share class allotted

UK Postcode

UK Postcode

UK Postcode

UK Postcode

UK Postcode

Name

Address

Name

Address

Name

Address

Name

Address

Name

Address

Please give the name, address,telephone number and, if available,a DX number and Exchange of theperson Companies House shouldcontact if there is any query. Tel


Please enter the number of continuation sheets (if any) attached to this form






Numberallotted

Numberallotted

Numberallotted

Numberallotted

Numberallotted

A director / secretary / administrator / administrative receiver / receiver manager / receiver

Signed Date

Please delete as appropriate

89


Do-It-Yourself

BUSINESS,FINANCE& LAW

IndexA

accounting reference date (ARD) 34allowance 25annual accounts 34

deadlines 35articles of association 21

example 39, 40

B

basic personal allowance 25board meeting 15

C

capital allowances 31chairman 11, 12continuity 8corporation tax 30

calculating 30form CT600 33rates 30self-assessment 32

CT600 33

D

directors 11duties and liabilities 11

disclosure obligations 8dividends 24, 26

saving tax 26

E

earnings threshold 24

F

first meeting of directors 22example minutes 46

form 10 81form 10, example 54form 12 80form 12, example 53form 88(2) 85form 88(2), example 58form of consent to short notice

example 49

G

general meeting 15

I

Income Tax 25income tax 25

rates of 25Inland Revenue 22

L

limited liability 7

M

meetings 15memorandum of association 20

example 36minutes

example 50

N

name, changing company 10naming your company 10

sensitive words and expressions 60National Insurance 24national insurance 24

earnings threshold 24upper earnings limit 25

notice of meetingexample 48

O

officers 11ordinary resolution

example 51ownership 7

P

Pay As You Earn (PAYE) 24paying yourself 24personal allowance 25poll 18

Q

quorums 18

R

record-keeping 8registers

register of directors 43register of directors' interests 45register of members 42register of secretaries 44

resolutions 15deciding when to use 15examples 46procedure for passing 16types of 16, 61, 62, 63

S

salaries 24secretaries 12

duties 12

liabilities 12self-employed 24sensitive words and expressions 60seperate legal entity 7shares

certificates 14directors authority to allot 14example share certificate 41issuing 14pre-emption rights 14share capital 13

authorised 13issued 13

subscriber shares 14special resolutions

example 51statutory books

register of directors 43register of directors' interests 45register of members 42register of secretaries 44

T

Table A 64, 65tax code 25

U

upper earnings limit 25

V

VAT 27calculating 27form VAT 100 29rates of 27rates of VAT 27taxable turnover 27VAT 100 29VAT return 28, 29VAT threshold 27

votingby poll 18directors 18

W

wages 24wages and payroll 24written board resolutions

example 47written shareholders resolution

example 52

diy ltd co formation

Documents