Role of Registrar in Registration of Companies for Business Formation UK


For the formation of any company, an initial step is to get the company registered. Registrar is the place where all the registrations regarding the companies are done. The Registrar of United Kingdom is the Companies House. The Registrar’s services are provided in different areas. Such as Wales, England and Scotland, each of them has a different Registrar. One may contact the Registrar relevant to the area where the company is to get registered. This article provides a guidance for the initial steps to be taken to open a company in UK.

Receivables of the Registrar

For a company intended to have a business formation UK, the Companies House must be contacted for the process of registration. The relevant documents should be prepared before the registration process starts. The documents should then be forward to the Registrar. The following documents should be sent to the Registrar:

According to Section 10 Companies Act 1985:

  • The memorandum and any articles should be sent to either the Registrar of Wales, England or Scotland, depending upon where the memorandum states the company to be registered.
  • The memorandum should include the names of the possible directors and secretaries of the company.
  • There should be a signed agreement proving the assent of all the subscribers and also the directors and secretaries.
  • If a person submits the memorandum on behalf of the subscribers, the details about that person should be mentioned in the memorandum.
  • The memorandum should include the expected place of registry for the company.
  • For a valid appointment of the director or secretary, the appointment should be mentioned in the memorandum.

Consent of the Registrar

As mentioned in Section 14 of Companies Act 2006, if all the documents submitted to the Registrar are complete and according to the requirements of the registration, the Registrar will register the documents. As in the following case:

R v Registrar of Companies, ex p Bowen 

A group of unregistered dentists intended to form a company named “The United Dental Service Ltd.” The unregistered dentists who were also the subscribers were refused by the Registrar for the registration of the company. The Registrar argued that as the dentists were unregistered, the word “Dental” in the title had to be changed. Another alternative solution was to mention in the memorandum that only the registered dentists will work in the company. The subscribers sought justice against the Registrar.

Lord CJ Held:

  • The main issue was to judge whether the word Dental would be offensive under the Dentists Act 1878.
  • These words elaborated the nature of the company and not the persons who would work there.
  • As the words were not offensive under any statute, the refusal by Registrar was unfair.

The decision was supported by AVORY J and BANKES J.

Change of rule in Companies Act 2006

The previous mentioned case held under the Companies Act of 1985. Hence, the Registrar’s powers in case of alteration of names was limited. The case gave an insight about the right given to the company for choosing a company name. Hence it may seem that to register a company name UK is an easy task.

However, changes have been made in the old version of Companies Act. According to the 2006 version the Registrar has more powers related to the names of companies. Hence, it restricts the use of “Dental” without the assent of General Dental Council (subsection 55 and 56 of Companies Act 2006). Thus, the company’s name should be carefully selected and judged per the requirements mentioned in Companies Act’s 2006 version to register a company name UK.

Rejection by Registrar

According to Section 7(2), if a company has some unlawful objective, its formation can be stopped by the Registrar. Hence, if the Registrar is rightly unsatisfied, he may reject the request for registration. For instance, the case of:

R v Registrar of Joint Stock Companies

It was a company being formed for the purpose of selling tickets of an Irish raffle. Two men decided to open a company for selling the tickets of lottery belonging to Ireland. However, at the time of registration, the Registrar refused after seeing the objective, refused for registration. The case was presented in Court of appeal.

 Scrutton LJ Held:

  • Probably the reason for opening a company for this selling ticket was that the rules of Lotteries Act 1823 for any fraud does not apply on a company.
  • The lottery was authorised by an Irish Act.
  • However, the company could work legally in England only when the Imperial Parliament allowed it to.
  • The authoritative parliament of any area can allow the sale of tickets in that area.
  • As there was no authority of the Irish Parliament in England, the appeal was discarded.
  • From this prior data, the company in this case was working illegally. Hence, the Registrar’s decision was fair.

Cancellation of Registration via Proceedings

If the Registrar passes the company in the registration and the company is successfully registered, it does not mean that the company will have objectives that are completely lawful. However, if for some reason the company has been issued certificate of incorporation, it does not remain simple to cancel its registration. The reason is that it does not remain possible to challenge the firm’s regularity on the basis of its unlawfulness. However, the cancellation of the company’s registration can be done by lawsuit.

Take into consideration the example of a case:

Bowman v Secular Society Ltd

It was a company with limited guarantee and it was registered as well. The company’s objective was that the promotion of an idea which stated that the basis for the conduct of human should be a knowledge that is not supernatural. Rather it is natural. Moreover, it also promoted the belief that all the actions are ended by the prosperity of human. The company was presented a gift of residuary estate. Nevertheless, the validity of any such gift or bequest was questioned. These beliefs were accused to be in contradiction to the beliefs of Christianity and public policies as well. House of Lords stated that the objective was not unlawful.

Lord Parker Held:

  • As the company was formed as a firm limited by guarantee under the Companies Acts from 1862 to 1893. According to the Section 18 of 1862 Companies (which is currently, Section 16 (3) of the 2006 version of Companies Act), any such company has the authorities of a regular incorporated company.
  • The appellants argued that the any bequest to the company was unlawful. The reason that they proposed was the objectives of the company were unlawful or at any point in contrary to law.
  • However, this could not be presented by the appellant as an argument.
  • According to Section 15(4) of Companies Act 2006, the certificate of incorporation proved that the company was rightly formed, when a number of subscribers gathered to work for a lawful purpose. However, it was never mentioned in this Section that any unlawful goal of company would become legal after registration.
  • Any money spent by the directors for any illegal goal would be the misuse of authorities.
  • However, a company was allowed to sign legal agreements even if the company’s objectives are completely unlawful.
  • Moreover, it was not possible to get a company registered with completely unlawful goals for a Registrar may check the objectives legally.
  • Hence, the donee had the right to benefit from the gifts which were fulfilling all the legal requirements.

Practical drawbacks of the incorporation method

It is a mere myth that the formal procedure of registration is efficiently handling the incorporation of companies. It is tried to portray that the formation of companies is genuine and people who want to operate the company get the paper work done. They intend to work together for some lawful purpose. And send the required documents specially constituted for their specific purpose. However, the reality is quite different from what is being portrayed.

Nearly, 60% of the companies that are registered in UK are registered as such that their paper work, which includes the memorandum and objectives of the company, is done by someone who is not intending to run the company. The registration is taken as a mere way to get a readymade company. There are firms that form a collection of every type of incorporated company and sell it to customers.

Rulings regarding Trade Union 

Nevertheless, the registration process allows free incorporation of random companies. But there are certain rulings that have to be followed while forming a trade union. A trade union cannot be created under the Companies Act 2006. This has been provided by section 10(3) of the Trade Union and Labour Relations Act 1992. However, if this rule is not followed, the formation of such a firm will not be considered lawful. Hence, one may not be able to form a trade union as easily and freely as other companies.

 Judicial review of Registrar’s decision

The judiciary may review the decision of Registrar to incorporate any particular company. For further elaboration, consider the following case:

R v Registrar of Companies, ex p AG

Lindi St Claire

It was a limited company registered lawfully. However, the company was formed to run prostitutes’ business. The subscriber of the company were two women, one of them was a prostitute and the other was a cashier. The Registrar at first did not like the name being proposed by the subscribers. As the words “Prostitute” and “Hooker” were being used in proposed titles. However, after the change of name the Registrar granted approval for the registration of company. As the objective of the company was morally detrimental to the policies governing public conduct, Attorney General sought lawsuit for the review of the formation of company. One of the owners, who was a prostitute, of the company said that it was unjust to quash the company after it had been considered legal.

ACKNER LJ Held:

  • The lawsuit was justified as the Attorney General has the authority to review the registration process done by the Registrar.
  • Any agreement signed for any sexual purpose was contradictory to moral values of the society and could not be imposed on the society. Hence, it was illegitimate.
  • Although the business did not indulge any crime, yet the contract was illegal.
  • After considering the above mentioned, it became clear that the registration had to be cancelled.

Hence the order for cancellation of registration was given.

The decision was supported by SKINNER J.

Completion of Registration Process

According to Section 13 of Companies Act 1985 the following steps should be taken after the required documents have been submitted by the company. The same rulings are provided in Companies Act 2006 under the Sections 15 and 16.

  • Once the memorandum of a company has been registered, the Registrar should issue a certificate of incorporation to the company.
  • And for setting up a limited company UK, a certificate expressing that the company is limited should be issued.
  • For the authentication of the registry, the Registrar’s sign is required on the certificates and his seal as well.
  • The subscribers along with any addition to subscribers’ list, may be taken as the body of the company from the day of certification.
  • The certificate of incorporation provides a proof that the company has fulfilled the requirements of registry mentioned in Companies Act. Also that the company has been ratified under the Act and has completed the registration process lawfully.

However, if someone wants to open a company in UK, he must know the rules and make sure that the people who will become the future body of corporation of the company devise the memorandum and get the registration completed. No unlawful goal should be involved in the memorandum to secure the company from any future lawsuit against it.

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