What is a ready-made company?

Incorporation Services Limited provides an expert service for all your company formation and company law requirements. We keep a stock of ready made companies for immediate transfer. In practice, now that electronic registration meens we can set up a new company in a matter of hours, ready made companies are now only very occasionally required.

A ready made company is one set up by registration agents or solicitors for the purpose of transferring it to their client when required. For many years the ready made company was an invaluable device, enabling a new project to be incorporated very quickly or a contract entered into in a company's name, etc. without waiting for the company to be incorporated. While the practice is not completely obsolete, the use of ready made companies has declined since electronic registration of companies was introduced.

A ready made company should always be a brand new company, certified as never having conducted any trade or business and having no liabilities. It should not be a company that has previously traded or been used for any purpose.

The company will have been registered using individual or corporate nominees as the subscribers to the memorandum and articles and as the first director and secretary. In many cases the nominees, as the members or directors of the company will pass resolutions before transfer effecting such changes as the client may require, such as a change of name, increase in authorised share capital, adoption of special articles of association, etc.

The company is transferred by the existing directors appointing the new directors and secretary. The original nominee directors and secretary then resign. The subscribers' shares must be transferred to the new shareholders and this should be shown in the company's register of members. The transfer will require a stock transfer form stamped with the £5 stamp duty (increased from 50p from 1.10.99). Attempts to avoid this, e.g. by the subscribers purporting to waive their rights to their shares are suspect and should be avoided.

Most registration agents provide a standard package when supplying a ready made company, typically comprising supply of the certificate of incorporation, a number of copies of the memorandum and articles, some form of statutory registers and all the required transfer documents. Additional services, such as effecting the changes mentioned above, completing the statutory registers, providing registered office facilities are usually available at additional cost. Incorporation Services Limited provides all these services.

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