The certificate of incorporation is the beginning, not the end. This article gathers the obligations of the Companies Act 1997 that bite from day one.
Step 1 — shares and the share register
On the registration of a company, shares are issued to the persons named in the application as shareholders, in the numbers stated. Section 46A deals with the consideration for shares issued on registration.
So the first shareholding is settled automatically. What the company must then do is open and maintain the share register under section 67, containing the particulars that section requires. Section 68 governs where it is kept, section 70 imposes a directors’ duty to supervise it, and section 72 prohibits entering trusts on it. Section 75 deals with share certificates.
Step 2 — the registered office and the records
| What | Section |
|---|---|
| A registered office in the country, identifiable and easily accessible to the public | s 161 |
| An address for service | s 167 |
| Signed consents of every director, secretary and shareholder, kept at the registered office and producible on written request | s 13A |
| The company records — constitution, minutes, resolutions, registers of directors and secretaries, communications to shareholders, financial statements, accounting records | s 164 |
| Accounting records correctly recording and explaining the transactions | s 188 |
| A register of charges, once there are any | s 225 |
A failure to keep proper accounting records is not merely an administrative default. Section 348A imposes personal liability on directors where proper accounting records were not kept, and section 188 requires records that correctly record and explain the company’s transactions and would enable the financial position to be determined with reasonable accuracy at any time. Start them on day one, not at the first year end.
Step 3 — directors, secretary and auditor
- Notify changes. Section 137 requires notice of a change of directors to the Registrar — and section 19(1)(b) makes the latest section 137 notice the reference point for outsiders.
- Secretary. Sections 169 and 170 govern the appointment and removal of a secretary.
Step 4 — the recurring calendar
| Obligation | When | Section |
|---|---|---|
| Annual return to the Registrar | Each year, in the prescribed month | s 215 |
| Annual meeting of shareholders | Each calendar year, within the periods s 101 sets | s 101 |
| Financial statements, and group statements if there are subsidiaries | Within the period after balance date that s 179 allows | ss 179–182 |
| Annual report, and sending it to shareholders | Before the annual meeting | ss 209–212 |
| Registering charges | Within the period s 222 allows after creation | s 222 |
| Notifying changes of directors, registered office and address for service | Promptly | ss 137, 162, 168 |
Under section 366, one of the grounds on which the Registrar may remove a company from the register is that the company has failed to file an annual return in the circumstances there stated. Removal ends the company’s existence, and its property vests in the Registrar under section 373. Restoration under sections 378 or 379 is possible but costs far more than the return.
Step 5 — obligations outside the Companies Act
- Foreign investment. A foreign enterprise must be certified under the Investment Promotion Act 1992 before carrying on business.
- Tax. Registration for income tax, goods and services tax, and salary and wages tax where employees are engaged.
- Employment. The Employment Act (Chapter 373) and, for non-citizen staff, work permits.
- Superannuation. The Superannuation (General Provisions) Act 2000 where the employee thresholds are met.
- Licences. Sector legislation — banking, mining, petroleum, forestry, fisheries, transport and the professions each have their own regime.
- Security interests. Registration under the Personal Property Security Act 2011 where the company takes or gives security over personal property.
Step 6 — set the governance up while it is easy
- Decide whether to adopt a constitution, and if so, what it should restrict or vary.
- Adopt an interests register practice so that section 118 disclosures are made and recorded as they arise.
- Fix the balance date under section 176 and work the reporting calendar back from it.
Sources
- Companies Act 1997 — ss 13A, 19, 42, 46A, 67–75, 101, 128–130, 137, 138, 140, 161–170, 176, 179–182, 188, 190, 195, 209–215, 222, 225, 366, 373, 378, 379, 348A
- Investment Promotion Act 1992
- Employment Act (Chapter 373)
- Superannuation (General Provisions) Act 2000
- Personal Property Security Act 2011
Before relying on anything here, read the current text of the Companies Act 1997 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.