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Listening: a conversation regarding company formation (1)

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Ms Wyatt: Channel Island Formations, how may I help?

Mr Wiseberg: Hello, yes. I’ve been looking through your website. My lawyer suggested that using a company formation agent might speed up the process of incorporation.

Ms Wyatt: Yes, it certainly will.

Mr Wiseberg: Good. But I understand that it’ll still take five to eight days before I can begin trading.

Ms Wyatt: Really? No. No no, it’s normally much faster than that. You can be fully registered in a matter of hours; you could be trading by the end of the week.

Mr Wiseberg: That’s great.

Ms Wyatt: In fact, you could be in business by the end of this phone call if you were interested in buying a shelf company.

Mr Wiseberg: You mean an existing registered company?

Ms Wyatt: Yes. We can transfer a company that has already been incorporated to you, which would reduce the time we’d need to spend setting it up. All you’d need to do is change a few of the company's basic details, such as its registered address.

Mr Wiseberg: Would this be a company that has traded before?

Ms Wyatt: No. Although some of our competitors have been known to sell companies that don’t always have the best of reputations.

Mr Wiseberg: Well, that’s exactly my concern. In my experience, it’s safest to start from scratch. In any case, the end of the week is fine but I’d prefer to form a brand new company.

Ms Wyatt: Certainly. And have you considered where you would like the company to be registered?

Mr Wiseberg: Yes. I’d originally intended to register in the UK, but I’ve since been told that incorporating my company in the Channel Islands might be advantageous. Now if I register in Jersey, is English law applicable?

Ms Wyatt: Your company will have to abide by Jersey law, much of which is based on English law. However, I must tell you that Channel Island Formations don’t advise on matters of law. We can recommend someone, though.

Mr Wiseberg: No, that’s fine. I have my own attorney. But I do have a couple of questions that you may be able to answer.

Ms Wyatt: I’ll certainly do my best.

Mr Wiseberg: Great, thanks. OK, first I wanted to check on how the accounting reference date is calculated once I’ve incorporated the company.

Ms Wyatt: That’s quite simple. It’s the last day of the month in which the anniversary of incorporation falls. If your company is incorporated on the 24th of August this year, the accounting reference date will be the 31st of August.

Mr Wiseberg: And presumably its first financial year would end on the 31st of August next year?

Ms Wyatt: Yes, or within seven days of that date.

Mr Wiseberg: So there’s some flexibility? OK. Now, the lawyer who put me on to you also suggested that you might have some way to help preserve shareholder confidentiality? Is this a service you can offer?

Ms Wyatt: That would depend on what you had in mind.

Mr Wiseberg: Of course. This is the situation—some of my shareholders may need to remain anonymous for commercial reasons. But I understand that the name of every shareholder of every UK company is recorded in both the company's statutory register and at Companies House—so wouldn’t this information be publicly available?

Ms Wyatt: Normally, yes. However, many clients do require confidentiality for perfectly valid reasons, and we are able to offer a nominee shareholder service.

Mr Wiseberg: And how does this service work?

Ms Wyatt: We offer several limited companies as nominee shareholders depending on the particular needs of the client. The nominee shareholder will execute a declaration of trust in favour of the beneficial owner of the shares.

Mr Wiseberg: The beneficial owner?

Ms Wyatt: The true owner. Under the declaration of trust the nominee owner agrees to exercise all voting rights and otherwise deal with the shares only in accordance with the instructions of the beneficial owner. The name of the nominee shareholder then appears on all public records relating to the shareholding.

Mr Wiseberg: And how much does this service cost?

Ms Wyatt: The annual subscription rate is £190 plus VAT with a surcharge of £75 plus VAT for each additional beneficial owner.

Mr Wiseberg: Well, it sounds just the thing for some of my investors. OK, I think that’s everything I wanted to ask. But before I go ahead there are a couple of things I need to check with my attorney, so then I’ll get back to you.

Ms Wyatt: If it would be more convenient you can also take advantage of our fully automated online incorporation service.

Mr Wiseberg: Thanks, but I think I’d feel happier speaking to someone—I may have a few more questions for you once I’ve spoken to my lawyer. So thanks again for your help, I’ll get back to you a little later to arrange registration.

Ms Wyatt: I’ll look forward to your call, hope to speak to you later.

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