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GENERAL INFORMATION
WHAT IS A COMPANY?
A company is recognised in law as a legal
entity, separate from the person or persons
who formed the company and/or the directors
and shareholders i.e. it has a separate
legal existence.
WHAT TYPES OF COMPANIES CAN BE
FORMED THROUGH FORMATIONS HOUSE?
Formations House can help you in forming
a Private Company Limited by Shares. In
this business structure, a Member's liability
is limited to their capital contribution
in the company.
FEATURES OF A PRIVATE LIMITED COMPANY
(limited by shares)
A private UK limited company (limited by
shares) is considered as one of the most
easily managed and cost effective business
structures. Some of its outstanding features
are:
- No minimum or maximum share capital requirements.No specific qualification requirement for
company director, secretary or shareholder.
- No nationality or residence restrictions
for company director, secretary or
shareholder.
- A private limited company can just have
one director who may also be the only
share holder.
- A private limited company's resources can
be used to assist in the purchase
of shares of the company when someone
wishes to leave the company.
- A private company is prohibited to issue
its shares to the public.
- Private companies up to a certain size
can be permitted to file abbreviated
accounts with the register of companies.
- Only a private limited company can dispense
with obligations to hold an annual
generalmeeting
- Only a private limited company can dispense
with the formalities of holding general
meetings by having a special resolution
in writing
- A private limited company can start trading
immediately upon incorporation. It
does not require any trading certificate
to start its business.
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ADVANTAGES AND DISADVANTAGES OF A PRIVATE
LIMITED COMPANY
ADVANTAGES
- A private limited company has a separate
legal existence. This means that properties
will be owned by the company itself
and all contracts would be signed
on its behalf. The directors and secretary
can only act as agents. Therefore
the company is not dissolved on the
resignation, bankruptcy or death of
a director. The company can be dissolved
only by winding up, liquidation or
order of the Registrar of Companies
or by the Court.
- Limited liability is another advantage
of a private limited company. The
shareholder's liability is limited
to the value of the shares held by
them should things go wrong. The personal
assets of a shareholder cannot be
used to pay off the debts.
- Incorporation as a limited company will
protect the selected company name.
Once incorporated, it is listed in
the register of companies maintained
by Companies House. Therefore no one
else can incorporate using this name.
- Tax benefits are also applicable. The directors
of the company are required to pay
income tax but the company pays corporation
tax on company profits which is one
rate of tax only and averages out
at much less than if income tax were
paid on the profits.
- A private limited company has strong and
structured procedure to resolve any
disputesbetween the shareholders of
the company.
- It is easy to transfer interest in business
through ownership of shares.
- A private limited company also offers improved
national insurance benefits.
DISADVANTAGES
- There are strict legal requirements under
the Companies Act to file annual accounts
and annul returns.
- All the company information is publicly
disclosed through Companies House.
- Directors of the company have to comply
with legal standards of care in conducting
business.
- Higher national insurance costs are involved.Because of limited liability, the directors
or members of a private limited company
may have to give personal guarantees
to banks, lenders or landlords.
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COMPANY FORMATION PROCEDURE, COST AND REQUIREMENTS
WHO CAN FORM A COMPANY?
According to the Companies Act 1985 and
subsequent legislation, a private limited
company can be formed for any lawful reason
by one or more persons with one subscriber
to the Memorandum of Association.
WHAT IS INCORPORATION?
Incorporation of a company is a procedure
by which the company is registered at
Companies House and becomes a legal entity
separate from is owners. This process
is commonly known as registration, incorporation
or formation.
HOW DO I FORM / INCORPORATE MY
COMPANY THROUGH FORMATIONS HOUSE?
Formations House, an approved registrar,
has completely automated the company incorporation
procedure. You can form your company online
with no hard copy documents to sign. All
you need to do in fill in Formations House
online application form which asks you
for all the required information and company
details.
Please click on the following link to go
to this online application form: http://www.formationshouse.com/search/search.php
ELECTRONIC COMPANY FORMATION PROCEDURE
TIME REQUIRED FOR COMPANY FORMATION
Using Formations House' electronic company
formation services, the entire company
formation procedure is completed within
3 to 4 days, unless you have opted for
Formations House "Express Formation" service.
This service would cost you £25 (extra)
and would normally form your company within
8 working hours (9am to 5 pm GMT).
WHAT IS THE COST OF COMPANY FORMATION?
Formations House' standard company formation
package would cost you £50 unless you
opt for any of Formations House' additional
services. This cost includes the following:
- Company Incorporation Fee
- Free domain name
- Free email account
- Provision of all company documents
REQUIREMENTS FOR A PRIVATE LIMITED
COMPANY
Following requirements are to be fulfilled
to form a private limited company in the
UK:
- Registered address within the UK
i.e. a valid postal address in England,
Scotland or Wales.
- A minimum of 1 person (1 company
director) is required to form a private
limited company. Appointment of a company
secretary is optional. A company's sole
director can also be the company's secretary.
WHICH COMPANY DOCUMENTS WILL BE
PROVIDED BY FORMATIONS HOUSE?
Using Formations House' company formation
services, the only hard copy document
you will receive is your Certificate of
Incorporation. The rest of the company
documentation is available online in a
PDF format. You can login to your account
using your customer ID and password and
can access these documents online. These
documents include the following:
- Applications and Allotments
- Register of Transfers
- Particulars of Mortgage or Charge
- Register of Debentures
- Register of Members And Share Ledger
- Register of Directors
- Register of Secretaries
- Register of Directors Interests
- Minutes
- Share Certificates
- Memorandum of Association
- Articles- Table A
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SETUP
WHAT IS A REGISTERED ADDRESS?
It is the official address of a company
to which all the company related correspondence
is sent e.g. Companies House letters and
reminders, Inland Revenue returns and
other notifications etc.
It has to be a valid postal address anywhere
in the UK i.e. England, Scotland or Wales.
Any change of a company's registered office
address must be approved by the directors
and notified to Companies House using
Form 287.
CAN A P O BOX BE USED FOR REGISTERED
OFFICE ADDRESS?
Yes, provided the full address is given,
including the postcode, and it is validated
by the Royal Mail.
WHAT IS THE MINIMUM NUMBER OF OFFICERS
REQUIRED?
A private limited company must have at
least one director. Company secretary
requirement is optional. A company's sole
director can also be the company's secretary.
WHO BECOMES A DIRECTOR?
All private limited companies must have
at least one director. A director can
also be the shareholder of a company.
Usually the members (shareholders) of
a company select the board of directors.
Following are the restrictions which are
applicable on the appointment of a director:
- A director must not have been disqualified
by a court from acting as a company
director, unless s/he is permitted
to act as one for a specific company
- The director must not be an undischarged
bankrupt, except for leave of the
court
- Must be between the age of 16 and 70 unless
approved in a general meeting of the
company.
There are no nationality or residence restrictions
for company directors.
Directors are appointed to manage company's
affairs in accordance with the Articles
of Association and the law.
Unless it is specified in the Articles
of Association of a company, there is
no restriction for the maximum number
of directors.
WHO BECOMES A SECRETARY?
For a private limited company's secretary,
there are no specific qualification requirements.
Neither there are any nationality or residence
restrictions for company secretary. Therefore
any one who is responsible enough to look
after company's affairs can be the company
secretary.
DOES EVERY COMPANY NEED A SECRETARY?
No, company secretary requirement is
optional. However, if a company has only
1 director, he can act both as a director
and a secretary. A person independent
of the sole director can also be appointed
as the company secretary, if required.
WHAT RIGHTS DOES A COMPANY SECRETARY
HAVE?
The Companies Act grants no special rights
to the company secretary. These rights
depend on the clauses in the employment
contract / agreement.
WHAT ARE THE DUTIES OF A COMPANY
SECRETARY?
According to the section 744 of the Companies
Act, the secretary is an officer of the
company and has the following responsibilities
- Keeping minutes of board and shareholders'
meetings.
- Timely delivery of statutory forms and
shareholders' resolutions to Companies
House.
- Giving notice of shareholders' meetings.
- Registration of share transfer.
- Maintenance of statutory documents and
company records.
- Providing members and auditors with 21days
notice of annual general meeting,
and 14 days notice of a meeting other
than AGM or to pass any resolution.
WHERE DOES FORMATIONS HOUSE COME
IN?
A private limited company can be incorporated
if you do not have a company secretary.
However, if you decide to appoint a secretary,
Formations House can help you in this
regard by providing a Nominee Secretary
Service. This service would cost you £25
per annum.
WHAT IS THE ROLE OF A NOMINEE SECRETARY?
As the nominee secretary is meant to
fulfill statutory legal requirements,
it does not perform any secretarial duties.
Also, if you want to open a bank account,
the secretary's signature is not required
on the bank mandate form.
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NAMING
THE COMPANY
CAN I CHOOSE ANY NAME I WANT FOR
MY COMPANY?
It must be ensured that your selected
company name is acceptable to Companies
House, before you begin the incorporation
procedure. Following restrictions are
applicable on company's name:
- You cannot register the same name as another
company;
- The use of certain words is restricted
e.g. international, holding etc.
- Names likely to cause offence are not allowed
For a complete list of sensitive names,
please see the addendum.
If your company name is similar to another
name, an objection can be raised against
it within 12 months following your company
incorporation. Consequently you may be
directed by the Secretary of State to
change the company name.
I HAVE REGISTERED A LIMITED COMPANY,
CAN I OBJECT TO SOMEONE TRADING UNDER
MY NAME?
These name disputes are usually taken to
the court for decision. Formations House
would advise you to consult a solicitor
in this regard
HOW DO I OBJECT TO THE REGISTRATION
OF A COMPANY NAME THAT IS VERY SIMILAR
TO MINE?
In order to raise an objection, you need
to send a letter of complaint to the office
of The Secretary of State for Trade and
Industry.
England & Wales
Companies Administration Branch
Companies House
Crown Way
Cardiff CF14 3UZ |
Scotland
Companies House
37 Castle Terrace
Edinburgh EH1 2EB |
CAN I CHANGE MY COMPANY NAME AFTER
INCORPORATION?
Yes, a company name can be changed any
time after the incorporation.
CAN FORMATIONS HOUSE FILE A NAME CHANGE
APPLICATION ON MY BEHALF?
Yes, Formations House can file a name
change application on your behalf. It
would cost you £25 and it normally takes
a week to complete this process. You will
receive a new Certificate of Incorporation
as soon as your company's name is changed.
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COMPANY SHARES
WHAT IS SHARE CAPITAL?
Share capital is the investment in a company
by its members (owners). The amount is
contributed in exchange for the share
of ownership, a certificate being issued
for each share.
When a company is established, the people
who form the company decide that the member's
liability is limited to their contributed
share capital. The Memorandum of Association
for a company states the following things
in this regard:
- Total share capital of the company
- The division of share capital into shares
of fixed amount
- The names of the people who have agreed
to own shares and the number of shares
each will own.
Those people who have agreed to take some
or all of the company shares are called
"Subscribers"
WHAT IS AUTHORISED SHARE CAPITAL?
Authorised share capital is the maximum
value of shares that can be distributed
to existing or potential investors. In
other words, the amount of share capital
stated in the Memorandum of Association
is the company's 'authorised' share capital.
The company's authorised share capital
may also be called its 'nominal' share
capital.
IS THERE A MAXIMUM AND MINIMUM
SHARE CAPITAL?
Minimum
of 1 share is required for a private limited
company and there is no maximum share
capital limit.
CAN A COMPANY ALTER ITS AUTHORISED
SHARE CAPITAL?
Yes, a company can alter its authorised
share capital.
In order to increase the authorised share
capital, an ordinary resolution needs
to be passed. A copy of this resolution
and a notice of increase on Form 123 must
be sent to Companies House within 15 days
of being passed.
Similarly, company's authorised share
capital can be decreased by passing an
ordinary resolution to cancel all those
shares which have not been taken or agreed
to be taken by any person. Notice of cancellation
of shares on Form 122 must be sent to
Companies House within one month of this
change.
WHAT IS ISSUED CAPITAL?
Issued capital is the value of the shares
issued to shareholders. The amount of
issued capital cannot exceed the amount
of the authorised capital.
A private limited company is not required
to issue all of its share capital at once.
CAN A COMPANY ALTER ITS ISSUED
SHARE CAPITAL?
A company may increase its issued capital
by allotting more shares but only up to
the maximum allowed by its authorised
capital. Allotments must only be done
under proper authority. However, a private
company is normally restricted to issuing
shares to its members, to staff and their
families and to debenture holders. However,
by private arrangement, the company may
issue shares to anyone it chooses.
CAN A COMPANY REDUCE ITS ISSUED
CAPITAL?
A company cannot normally reduce its issued
capital as this is the personal property
of the shareholders, not of the company.
However, the following exceptions apply:
- If a court order confirms a 'minute of
reduction' following a special resolution
of the company;
- If shares are redeemed (bought back) in
accordance with a redemption contract;
- If the company's articles allow it to buy
its own shares and this purchase is
authorised by a special resolution.
As a company cannot own its own shares,
the shares are regarded as cancelled
when the company buys them.
WHAT DOES THE ALLOTMENT OF SHARES
MEAN?
'Allotment' is the process by which people
become members of a company. Once the
subscribers agree to take shares on incorporation,
these shares are regarded as 'allotted'.
Later, more people may become the members
of the company and be allotted shares.
However, the directors must not allot
shares without the authority of the existing
shareholders. This authority is either
stated in the company's Articles of Association
or is given to the directors by resolution
passed at a general meeting of the company.
HOW DO I ALLOT SHARES?
Using Formations House' services, you get
a complete set of online company documents
available in a PDF format. These company
documents also include share certificates.
You can print these share certificates
and can use these to allot shares to any
new shareholder.
WHAT IS THE PROCEDURE TO TRANSFER
SHARES TO NEW INVESTORS?
The process for transferring shares to
new or potential investors is simple.
The existing shareholder has to fill out
the relevant portion of the Stock Order
Form and surrender the share certificates
to the potential shareholder. The shares
will officially be in the name of the
new member once the stock exchange transaction
clearing takes place.
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COMPANY STATIONERY
ON WHICH DOCUMENTS MUST THE COMPANY
NAME BE DISPLAYED?
A company must display its name in legible
lettering on the following documents:
- All the company's business letters
- All notices and other financial publications
- All bills of exchange, promissory notes,
endorsements, cheques and orders for
money or goods purporting to be signed
by, or on behalf of, the company.
- All bills of parcels, invoices, receipts
and letters of credit.
IS IT NECESSARY TO SHOW ANY OTHER
COMPANY DETAILS?
Yes, a company must display the following
details on all its business letters and
order forms:
- Company's registration number and place
of registration. the place of registration
can be one of the following:
| For
companies registered in England
and Wales: |
| Registered in Cardiff |
| Registered in England and Wales |
| Registered in England |
| Registered in London |
| Registered in Wales |
- Company's registered office address. If
a business letter or order form displays
more than one address, it is recommended
to state which is the registered office
address
IS IT NECESSARY TO SHOW THE DIRECTORS'
NAMES?
A company is not required to display its
directors' names on its business letters.
However, if a company chooses to do, it
must state the names of all its directors
i.e. it must show all of them or none
of them.
CAN FORMATIONS HOUSE HELP IN DESIGNING
COMPANY STATIONERY?
Yes, Formations House can certainly help
you in designing your company stationery.
You can purchase Formations House graphics
package which would cost you £100 and
it includes the following:
- Company Logo design
- Company letterhead and memo slip design
- Business card design plus 250 coloured
business cards
- 10 page static HTML website design
You can also give your own specifications
for stationery design. If you wish to
proceed, please visit www.graphics4less.com
.
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VALUE
ADDED TAX
IS VAT REGISTRATION MANDATORY FOR PRIVATE
UK LIMITED COMPANIES?
No, VAT registration is not mandatory for
all private limited companies. A company
needs to register for VAT only if it expects
its turnover to reach the VAT threshold.
However, you may also register voluntarily,
even though your taxable turnover has
not reached the VAT threshold. There are
certain advantages for registering with
the Customs and Excise, such as:
- You can collect VAT from your customers
in the form of output tax.
- You can reclaim input tax on purchase of
standard rated tax supplies.
WHAT IS THE THRESHOLD FOR VAT?
You need to register your company for VAT
with HM Revenue & Customs when:
- The turnover for last 12 months is more
than £64,000. OR
- If the turnover is expected to exceed
£64,000 during the next 30 days
CAN FORMATIONS HOUSE ASSIST IN VAT REGISTRATION?
Yes, Formations House can certainly help
you in getting your company VAT registration.
it would cost you £50 and it usually takes approx six weeks
to complete the registration process.
Once the registration process is complete,
you will be advised of your VAT number
directly by the VAT unit.
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BANK
ACCOUNTS
IS IT NECESSARY FOR EVERY PRIVATE LIMITED
COMPANY TO OPEN A BANK ACCOUNT?
No, it is not mandatory for a company to
open a business bank account. However,
if you want to start trading you need
a bank account for all your financial
transactions.
CAN FORMATIONS HOUSE HELP IN OPENING
A BANK ACCOUNT?
Yes, Formations House does provide an account
opening service for business customers.
The fee for this service is £500 and takes approx 10 days to complete
in most cases.
CAN FORMATIONS HOUSE OPEN A BANK
ACCOUNT IF I HAVE A BAD CREDIT HISTORY?
If you have a poor credit history or have
County Court Judgments registered against
you it is significantly more difficult
to get a business bank account opened.
However, Formations House may still be
able to open a business account for you.
An application for this service will be
looked at on an individual basis.
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DOMAIN REGISTRATION
AND WEB HOSTING
HOW CAN I START USING THE FREE DOMAIN
NAME THAT YOU HAVE REGISTERED FOR ME?
You need to purchase Formations House'
Web Hosting Service to use the free domain
name.
WHAT TYPE OF WEB HOSTING SERVICE IS
PROVIDED BY FORMATIONS HOUSE?
Formations House' Web Hosting Service would
cost you £50 per annum. It includes the following:
- 10GB Web Space
- Unlimited email address
- FTP and FrontPage extension support
I HAVE NOT PURCHASED THE WEB HOSTING
SERVICE WHEN I SIGNED UP, HOW CAN I SIGN
UP FOR IT LATER?
Just send us an email with the Company
name, domain name and Customer ID of your
account and Formations House will set
up the Web Hosting for you.
CAN I TRANSFER THE FREE DOMAIN
NAME WHICH YOU HAVE REGISTERED FOR ME,
FROM YOUR SERVER TO ANOTHER WEB HOSTING
COMPANY OF MY CHOICE? WILL I HAVE TO PAY
ANY TRANSFER FEES FOR THAT?
Yes you can transfer your domain name to
any other Web Hosting company of your
choice, by sending us their IPS TAG and
Formations House will release the IPS
TAG for them. No. you DO NOT have
to pay transfer or any other fees for
this.
HOW CAN I CREATE MORE POP EMAIL
ACCOUNTS OTHER THAN 'INFO' ACCOUNT YOU
HAVE PROVIDED?
You need to upgrade to pro version, which
costs £50 (annual).
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ADDITIONAL SERVICES
EXPRESS FORMATION
Using Formations House' online company
registration services, it usually takes
3 to 4 days to complete the incorporation
procedure. However, if you wish Formations
House can get your company registered
at Companies House within 8 working hours
(9am to 5 pm GMT). This service is called
Express Formation and it would cost you
£25 extra.
REGISTERED OFFICE
Registered office address is a mandatory
requirement to establish a UK Limited
company. A registered address is a valid
postal address within the UK i.e. England,
Scotland or Wales.
Formations House is able to provide you
with registered address service at a cost
of £25 per annum. This address is used only
to receive mails coming from Companies
House not from customers or other trading
parties.
If you use Formations House' registered
address service independent of company
formation services, it would cost you
£50.
NOMINEE SECRETARY
Company secretary is not a mandatory
requirement to establish a UK Limited
company.
However, if you require appointing a nominee
secretary, Formations House is able to
provide you with a Nominee Secretary Service
at a cost of £25. This nominee secretary
is only meant to fulfill the legal requirements
and does not perform any secretarial duties.
COMPANY INCORPORATION USING CUSTOMER'S
OWN ARTICLES AND MEMORANDUM
Formations House can get your company incorporated
using your own customized Articles and
Memorandum of Association. It would cost
you £25 extra.
As these customized articles and memorandum
require special processing, it takes a
week to complete the incorporation procedure.
VAT REGISTRATION
Formations House is able to get your company
VAT registered at a cost of £50. It usually takes approx six weeks to
complete the registration procedure.
BANK ACCOUNT OPENING
Formations House is able to open a business
bank account for your company at a cost
of £500. It usually takes 10 days to complete
this process.
ACCOUNTING SERVICES
Formations House' Accountancy Package
would cost you £300 every year and includes
the following services:
- Preparation of annual accounts, i.e.
Profit & Loss Account and Balance
Sheet
- Filing of annual accounts with Companies
House
- Filing of Corporation Tax Return (CT600)
form with HMRC
- Taxation Advisory in dealing with
Companies House and HMRC
- Free Accounting Software
With every Annual Accountancy package
ordered, Formations House supplies you
with a free copy of Infini Accounts Express
software to manage your business transactions
electronically. In addition, Formations
House also provides a review service for
the accounts that you maintain on Infini
Accounts Express, giving you the assurance
that your accounts are appropriately maintained.
TRADEMARK REGISTRATION
Formations House also provides trademark
registration service at a cost of
£350. It usually takes six months to complete
this process.
COPYRIGHTS REGISTRATION
Formations House provides copyright registration
services at a cost of £150. It usually requires 6 months to complete
this registration procedure.
APOSTILLE
Formations House is able to provide you
with an Apostille at a cost of £150. It usually takes 5 days to prepare
the Apostille.
COMPANY NAME CHANGE
Formations House is able to file a name
change application on your behalf. It
would cost you £25 and it usually takes 10 days to complete
this procedure.
CONVERSION TO A DORMANT COMPANY
Formations House can help you in changing
your company status to dormant. It would
cost you £75. You need to send us your company name
and registration number for this purpose.
It takes approx. 10 days to complete this
procedure.
SIC REGISTRATION
Formations House can get your business
SIC registered at a cost of £10. It takes approx. 3 days to do this.
CERTIFICATE OF GOOD STANDING
Formations House is able to provide you
with a Certificate of Good standing at
a cost of £50. It takes approx. 8 days to get this
certificate ready for you.
GENERAL POWER OF ATTORNEY
Formations House can provide you with a
general power of attorney at a cost of
£25 and it takes only 1 day to get it ready
for you.
MINUTES OF MEETING
Formations House can prepare notarized
minutes of meeting for you at a cost of
£25. Formations House can get these ready
for you within 24 hours.
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PAYMENT PROCEDURES
HOW CAN I MAKE MY PAYMENTS FOR
THE SERVICES PURCHASED?
Payment can be made using any of the following
methods:
- Cheque
- Draft
- Bank Transfer / Wire Transfer
- Credit Card
- Debit Card
- Solo / Switch
Cheque:
All cheques must be made payable to ACCOUNTS
CENTRE CY LTD. These cheques
are to be sent to the following address:
FORMATIONS HOUSE
29 Harley Street
London W1G 9QR
Draft:
All drafts are to be made payable to ACCOUNTS
CENTRE CY LTD. and to be sent
to the following address:
Accounts Centre CY LTD
29 Harley Street
London W1G 9QR
Bank Transfer:
Formations House bank details for bank
/ wire transfer are:
ACCOUNT NAME: ACCOUNTS
CENTRE CY LTD
ACCOUNT NUMBER: 92528436
SORT CODE: 40-05-18
IBAN NO: GB48MIDL40051892528436
SWIFT code: MIDLGB22
HSBC BANK ADDRESS
HSBC BANK PLC
431 OXFORD STREET
LONDON W1C 2DA
Credit Card:
In case of credit card, following information
is required to process the payment:
Card Type: e.g. Master,
Visa, American Express etc.
Card Number
Cardholders Name
Address where the card
is registered
Expiry Date
CCV Code: the last three
digits from the code written on the backside
of the card
Debit Card:
In case of Debit Card, following information
is required to process the payment:
Card Type:
Card Number
Cardholders Name
Address where the card
is registered
Valid From
Expiry Date
CCV Code: the last three
digits from the code written on the backside
of the card
Solo / Switch:
Following information is required:
Card Number
Cardholders Name
Address where the card
is registered
Valid From
Expiry Date
CCV Code: the last three
digits from the code written on the backside
of the card
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