The United Kingdom of Great Britain and Northern Ireland is one of the desired jurisdictions for the vast majority of international investors. Having a company (Ltd) here means adding points and trust to a business at the early start.
The UK is a reputable jurisdiction that is open to foreign capital but has pretty high compliance standards to follow. It has very developed banking and financial industries in addition to traditional manufacturing and service sectors. So, company formation in London or in any other city of this state may close a business to success due to the next advantages of the jurisdiction.
Advantages of the Jurisdiction
Company formation in the United Kingdom may appear to be a highly profitable business decision taking into account the peculiarities and advantages of this jurisdiction:
- strategic geographical location;
- prestige of the country, high business reputation in the international market;
- one of the biggest European markets;
- high standards of doing business and support for business;
- loyal approach to foreign investors and capital;
- affordable cost of registration and maintenance;
- protection of the interests of shareholders (liability is limited to the value of the share);
- no state currency exchange monitoring;
- skilled labor force;
- stability of the banking system;
- tax incentives;
- availability of many double tax treaties.
Peculiarities of a Limited Company in the UK
There are many forms of doing business in the UK. But, the most popular and simple to-form option is a limited liability company (Ltd).
To register an LTD, it is necessary to have at least one shareholder without requirements for status and residency. The liability of each shareholder will be always restricted to the amount contributed to this entity only. The size of authorized capital is 1.000 GBP, at the time of registration it is sufficient to pay 2 GBP. The legislation allows the emission of preference and common shares.
If you want more precise information about the alternative forms for doing business in the UK, Prifinance lawyers are ready to share with you the details about establishing a new company. Send an inquiry about any alternative legal and organizational form of doing business in the UK that interests you equally as Ltd.
How to Open Ltd Company in the UK
If you intend to register a limited company in the UK, this decision can be practically realized after passing the next incorporation steps:
- Setting your objectives and forming the list of commercial activities.
- Choosing and reserving a unique business name for a company.
- Arranging an official legal address for a future UK company.
- Gathering the details about shareholders, beneficiaries, people with significant control (anyone who possesses voting rights or 25%+ of shares), and managers of a company.
- Drafting and formalizing all the required documents, including these basic ones:
- Memorandum of Association;
- Articles of Association;
- Minutes of the First Meeting;
- Resolution of Shareholders;
- Share certificates.
If the company uses nominee service, then it should be added:
- Declaration of Trust;
- Legalized General Power of Attorney - General Power of Attorney under the Apostille (for 1 year or until the renewal date of the company);
- Stock Transfer Form - Transfer Order;
- Letter of Resignation - Refusal letter with an open date;
- Nominee Services Agreement.
- Submitting the set of registration documents and forms to the Companies House. Issuing the Certificate of Incorporation for a new company and making the respective entry in the UK Register of Companies (in the case of a positive decision).
- Registration for tax and social security purposes.
- Opening a corporate bank account.
- Applying for extra licenses and permits that may be needed for a chosen regulatory activity.
Legal and Regulatory Framework for a Business in the UK
The UK creates favorable conditions for international businessmen. They enjoy the same rights for doing business as the locals. Among others, registration of a company in the UK (LTD) gives the right to carry out international trade operations, and to provide services for individuals and legal entities - non-residents.
Company registration entails obligations on record keeping and filing of annual returns and financial statements to the competent authorities. In the first year companies receive a grace period (9 months) to generate financial statements.
Companies are exempt from auditing if:
- staff is no more than 50 persons;
- annual turnover is not more than 6.5 million British pounds.
- the balance value of the assets is no more than 3.26 million British pounds.
Tax System in the UK
Any limited company in the UK will be obliged to pay the next taxes in all applicable cases:
- Corporate income tax – 25%*
- Personal income tax – 45% (but may be lower - depending on the income)
- VAT – 20%
- Withholding tax (for non-residents) – (1) dividends – 0% (2) interests – 20% (3) royalties – 20%
- Capital gains tax – (1) corporate – see corporate income tax (2) personal – see personal income tax.
*For companies whose profits do not exceed 50,000 GBP will be applied a 19% corporate income tax rate.
How Prifinance Lawyers May Assist You
If you are targeted at company registration in the UK, Prifinance lawyers are ready to apply their confirmed expertise to facilitate the process, including through the next legal services:
- consult you about how to open a company in the UK taking into account the background of your business case and your commercial objectives;
- support the process of registering a limited company in the UK, including, but not limited to, verifying a company's commercial name, formalizing its official legal address, drafting and formalizing all statutory documents;
- support the negotiations with the officials of all state and municipal authorities as the case may be;
- open corporate bank accounts for a newly formed company;
- support the next operation of your Ltd in the UK.
We offer prompt company registration and bank account opening services in the UK and worldwide. New registration and ready-made options.