Company registration in United Kingdom Company registration in United Kingdom

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Main characteristics for registration in United Kingdom

Corporate tax
Best choice for:
Online Business
Time to complete the registration
1 day

Company Registration in the United Kingdom

The United Kingdom plays an important role in international trade and economy. This is one of major European leading business center, that attracts more than 35% of all foreign investment in Europe. It has an open economy and one of the lowest tax rates. This is one of the major financial and investment center with various large companies having headquarters there. The UK offers cultural and ethnic diversity, high-quality workforce, endless business opportunities and access to high-technology and innovative sectors. According to various rankings, the UK is among top countries for ease of doing business which means that the company formation and starting new business operations for your company in the UK will bring you comparatively low expenses and opportunities for starting your business rather easily without unnecessary formalities. Of course, the UK legal system is highly regulated, but its regulations are tailored to business needs and provide good opportunities for business growth. Despite the Brexit, the UK remains to be a stable business environment with overseas investment approach. It will probably remain even more attractive for foreign businesses in the upcoming years as its economic will be highly dependable on investments.

This article gives you an overview on how to set up a company in the UK and key points on how your business can benefit from it.

What types of legal entities is it possible to incorporate in the UK?

Foreign companies and citizens may register the company in the UK in the following types:

  1. Limited companies: is either a private limited company (Ltd) or a public limited company (PLC). A private limited company is the most popular type for company formation in the UK. This legal form is chosen as it can be set up by at least one shareholder who is not personally liable for company’s debts. Besides, it is managed by one director and there is no need to have a secretary unless otherwise provided in its articles of association. There is no requirement in relation to a minimum or maximum authorised or issued share capital.
    A public limited company is tailored for large businesses as a PLC is owned by at least two shareholders and at least two directors. Minimum issued share capital is £50,000 and it has to be paid up in no less than 25% in order to start operating.
  2. Partnerships: are divided into two forms, being a limited partnership and a limited liability partnership. Limited partnerships are formed by at least one general partner and one limited partner who have different obligations in terms of business debts. LLPs are set up by at least two or more members who are not personally liable for any debts that the company is not able to pay. Usually partnerships are used by professional service firms, such as accountants, lawyers.
  3. Sole traders: this is the simplest way for starting a business in the UK, though the sole trader remains personally responsible for business debts.
  4. Branches: are usually chosen by overseas companies wishing to have a business presence in the UK instead of incorporating a company there. The company must file annual accounts and comply with UK reporting requirements on an annual basis.

Company registration documents to be submitted depend on the type of legal entity you choose from.

How long does it take to register a company in the UK?

The term for registering a company in the UK is approximately 1 week provided that all documents are ready to be filed with the Companies House.

Tips: It is possible to file documents for registration online which will speed up the process.

What are the requirements for company names in the UK?

There is no requirement to reserve the company’s name prior to its incorporation. In the meantime, it is necessary to follow certain rules when naming your company and filing the company’s name together with incorporation documents. The Companies House will refuse to register a company name if it is offensive or implies a connection with central or local government, or with some public authorities. The company name cannot be similar to existing trade mark, and contain a sensitive word or expression. That is why it is necessary to check for similar and identical names prior to filing registration documents.

What are the requirements for shareholders and directors in a UK company?

As earlier mentioned, private limited companies have at least one shareholder and director. In relation to private limited company there is no requirement for either a shareholder or a director of the company to be resident in the UK. Public limited companies have at least two shareholders and two directors who can be of any nationality or residency.

Tips: certain amount of information about a company must be publicly available including, for example, the company’s annual accounts, registered office address and details of directors, company secretary (if there is one) and members. Please contact us for more details about nominal services.

Is it required to have a company secretary in the UK?

The Companies Act 2006 no longer requires private limited companies to appoint a company secretary. However, public limited companies are required to have a secretary with necessary skills and qualifications.

Is it necessary to have a registered address in the UK?

Yes, it is necessary have a registered address in the UK as this address is used for official communications (such as letters from HM Revenue and Customs). The information about registered address is publicly available.

What are the accounting requirements in a UK company?

A company must keep its accounting records at its registered address or other place chosen by a director. The records must be open to inspection at all times.

A financial year is usually a 12-month period for preparation of accounts. Every company must prepare accounts that report on the performance and activities of the company during the financial year.

Tips: if the company holds the account records at a place outside of the UK, it must send accounts and returns at least every six months and keep them in the UK.

In which case is it necessary to audit a company in the UK?

Private limited companies are exempt from obligatory audit. That’s said, only public limited companies are subject to audit. In addition, audit or review is mandatory if an entity exceeds certain quantitative thresholds (consolidating entities apply the thresholds to the consolidated numbers).


What is the cost of company formation in United Kingdom?

The cost of company incorporation in United Kingdom is Euro.

Tax System in United Kingdom

Companies registered in the UK are subject to corporation tax on their income and capital gains. Other taxes may include withholding tax, VAT, stamp duty and national insurance contributions.

What companies are qualified as tax residents in UK?

A company is resident in the UK if it is incorporated in the UK or if its central management and control are in the UK. In other words, it means that the central management is determined based on where the directors perform its duties. In certain cases, a company could be resident in another jurisdiction where a tax treaty applies.

What is a taxable period in UK?

A typical taxable period in UK is from 1 April to 31 March. However, each company may opt for another period.

When tax returns are filed in UK?

Companies submit tax returns in UK within 12 months of the year end.

What is corporation tax rate in UK?

A UK resident company is liable for corporation tax on its worldwide profits and chargeable gains. Currently corporation tax rate is 19%.

How are dividends taxed in UK?

There is no withholding tax on payments of dividends from a UK company. Generally, interest paid is subject to a withholding tax rate of 20%. A company may mitigate it in many cases of payment to a corporate entity, either by virtue of a double tax treaty with reduced rate, or the application of EU directives. It is necessary to apply for advance clearance to the UK tax authorities to make a payment of interest at the reduced withholding rate.

What is royalties tax rate in UK?

Royalty is subject to withholding tax at 20%, but it can be mitigated by virtue of a double tax treaty with reduced rate, or the application of EU directives.

What is VAT rate in UK?

The standard VAT rate within the whole territory of UK is 20%. It applies to most goods and services. Certain goods and services are exempt from VAT. Reduced rate of 5% applies to certain children car seats, home energy, etc. Zero rate applies to most food and children’s clothes. Postage stamps, financial and property transactions are exempt from VAT.

Company Liquidation in England (UK)

Similar to other parts of UK, a company liquidation in England can be done voluntary or involuntary.

What are the grounds for involuntary liquidation in UK?

A company incorporated in UK can be liquidated compulsory based on a court order. The court proceeding can be initiated by:

  • Creditors if a company cannot pay its debts;
  • Company itself;
  • Company’s directors or members;
  • Secretary of State for Business, Innovation and Skills;
  • Financial Conduct Authority.

What is the procedure of involuntary liquidation in UK?

Upon the receipt of the court order, the petition must be advertised in the Gazette and a provisional liquidator is appointed. Within 28 days of the appointment, the liquidator is responsible for drafting the balance sheet, distribution of assets and settlement of credits. Finally, the company is removed from the Companies Register.

What are the grounds for voluntary liquidation in UK?

A company’s director, administrator or liquidator may propose voluntary liquidation which is to be approved by company’s members.

What is the procedure of voluntary liquidation in UK?

When the liquidator is appointed they take control of the company and will be responsible for settling any legal disputes or outstanding contracts, selling off the company’s assets and use any money to pay creditors, pay liquidation costs and the final VAT bill, etc. Finally, the liquidator gets the company removed from the Companies Register.

Note: If the Companies Register has reason to believe that a company is not carrying on business or is not in operation, its name may be struck off the register and dissolved without going through liquidation. However, this is not a best scenario for companies having assets.

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