Despite Brexit, there are numerous reasons why the UK is a perfect location for starting a company there. Recently, the […]Read more
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Main characteristics for registration in United Kingdom
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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.
Foreign companies and citizens may register the company in the UK in the following types:
- 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.
- 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.
- Sole traders: this is the simplest way for starting a business in the UK, though the sole trader remains personally responsible for business debts.
- 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.
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.
There is no requirement to reserve the company’s name prior to its incorporation in the UK. In the meantime, it is necessary to follow certain rules in order to register a company name in the UK. The Companies House will refuse to register a company name if:
- the proposed name contains a sensitive word or expression;
- the proposed name is offensive;
- it implies a connection with central or local government, or with some public authorities;
- it is similar to already existing names of companies;
- it is similar to a registered trademark.
Similar names mean that they are fully identical, or differ either with only a symbol, or a word is common in the UK, or a word is identical in appearance from the existing name.
For this reason, before the company name is chosen, it is necessary to check for similar and identical names in the Registrar of Companies prior to filing registration documents. In addition, your lawyer should conduct a trademark search within registered trademarks and trademarks being in process of registration. If your company is identical to any trademark, such trademark holder can dispute your name.
Companies registered in England are ended in either “Limited”, “Ltd”, “LLP”, “plc” or other abbreviations indicating a type of the legal entity. Equivalents in Welsh are “Cyfyngedig”, “Cyf” or others for companies incorporated in Wales.
Tips: ecompany.ltd website contains searching tools that enable you to search for existing company names in the UK. Please use our website to check the last updated information on all UK companies.
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.
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.
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.
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.
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.
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).
You can incorporate a company in the UK by yourself or use the services of agents.
It is possible to submit documents online. Currently, the Companies House allows to submit documents online, through the software and on paper. The statutory fee for company incorporation in the UK is £10 for documents submitted through the software and £40 for documents submitted on paper. The Companies House allows the same-day incorporation with the statutory fee of £30 and £100 respectively. Web incorporation costs £12, but no same-day incorporation is allowed.
Any other changes to be made in corporate documents, such as change of name, re-registration, capital reduction, etc, are subject to additional fees.
Alternatively, you can use agency services for company formation. Ecompany.ltd acts as an agent on behalf of its clients. We work closely with our clients to prepare all necessary documents as accurately as possible. Our fee includes payment of statutory fees to the Companies House.
Our company is experienced in preparation of all set of documents, including shareholders’ agreement. Thus, we provide all services related to company incorporation in the UK.
- Hiring a representative (optional)
For company registration in the UK, you should decide whether you want to set up a company by yourself or use the services of an agent that will register the company on your behalf. Though you can solely submit your documents online, in certain cases it is recommended to hire an agent, who will consult you on each stage of company incorporation.
- Choosing a company name
Before you or your agent submit necessary documents, you are required to choose a company name. This is when you need an experienced agent to assist you in search for existing company names and trademarks. Even if the names are not identical, the experienced agent will advise you on whether you may have any difficulties with the name registration or in future with trademark infringement.
- Agreeing with shareholders on how to run mutual business
If you are not the sole shareholder, then you need to agree with other shareholders on how you will run the business beforehand.
Among the submitted documents are the articles of association or memorandum of association depending on the type of company. This document governs the directors’ rights and responsibilities, matters related to shares and their distributions, shareholders’ rights and responsibilities, etc. The UK allows the companies to use official standard templates (model articles). However, if you need to customize it, you should consult with an experienced agent.
- Hiring director(s) and company secretary
Another requirement is that your company should have director(s) and company secretary. The number of directors is defined by shareholders and is provided in the articles of association or memorandum of association.
- Submitting documents for registration
Once the company name is chosen, the articles of association is prepared and director(s) and secretary are appointed, you or your agent submit documents through the software or on paper. Alternatively, it is possible to send all documents online.
Finally, the Companies House registers the company or refuses to register on a specific ground.
All incorporation procedures at the UK Companies House takes 2 days. The total term of company formation in the UK with opening a bank account is 2-3 weeks, provided that the bank does not request for additional documents as a part of an identity check.
When you submit your documents online for company incorporation, the company incorporation certificate is sent to you using the same method. However, you can order a certificate of incorporation with certified facts related to your company. This service is also provided by the Companies House which is subject to additional statutory fee.
The certificate of incorporation contains facts held in the official register, including company number, names of each director, name of secretary, registered office address. Upon request, the certificate can be accompanied with good standing wording meaning a confirmation that a company has been in continuous, unbroken existence since its incorporation.
The incorporation documents are those you file to the Companies House in order to incorporate your company. It contains the minimum information required for processing registration and shows the company corporate details.
To set up a company in the UK you need to submit:
- application to register a company (form IN01);
- Articles of Association (or you should indicate that you use model articles);
- Memorandum of Association.
In order to prepare documents necessary for company incorporation in the UK, you need to prepare certain information. Please use the information below as a checklist:
- proposed company name which complies with the company name requirements;
- registered address in the UK;
- information of type of legal entity;
- details of company’s business activities by reference to a standard industrial classification code (SIC);
- details of the proposed director(s) and secretary;
- details of each beneficiary;
- statement of capital and initial shareholdings or a statement of guarantee;
- statement of compliance or guarantee.
The Registrar of Companies UK is the official authority that register companies and provide public data on companies in the UK.
The Registrar’s official name in UK is the Companies House and it contains details related to a company, including:
- basic company information (name, type);
- registered office address;
- business activities;
- company status;
- date of last accounts or confirmation statement filed;
- date of next accounts or confirmation statement due;
- full transaction filing;
- current and resigned directors and secretaries;
- insolvency information etc.
The access to the public data is free of charge and allows to access the last updated information on a company, so that you can check your business partners.
A shelf company, also called a “blank company”, “off the shelf company”, “ready-made company for sale”, or “aged company” is a company that is established by law firms and accountants, so that clients can buy a company in the UK rapidly and without any hassle.
In contrast to a company formation, if you purchase a company off the shelf you can start your business in the UK just in a couple of days.
Most of the reputable firms, like Ecompany.ltd, provide UK ready-made companies for sale with bank accounts.
Additionally, we may offer UK VAT registration for your company. VAT registration is required in most cases when a company offers goods and services in the UK.
To buy a UK shelf company, it is required to notarize a share sale and purchase agreement. Thereafter, the agreement will be registered with the UK Companies House. Non-residents can buy a UK shelf company without any restrictions.
Upon request it is possible to change company name, appoint new director and secretary and inquiry nominal services. Similar to online company registration in the UK, all procedure can be done without your presence in the UK.
After the sale of a ready-made company to the purchaser, the following documents are prepared:
- Certification of incorporation
- Memorandum and Articles of Association
- New Share Certificate(s)
- Transfer of Shares confirmation document
- Register with new and previous officer details
- Bank account details in the UK or other country (upon request)
- UK VAT registration (upon request)
A shelf company in the UK, also called a “blank company”, or “aged company”, is a company that is established by law firms and accountants.
However, buying a ready-made company or shelf company is no longer practicable in the UK, since online formation of a new company is much cheaper, faster and safer procedure. When establishing a new company in the UK, it is possible to set it up based on your business needs. For instance, you are free to choose any company name, choose your preferred address (in London or other city), etc.
That’s said, if you are considering to start your business in the UK, then it is advisable to incorporate a new company in the UK.
If you plan to operate your business outside the UK, then you can consider to register an offshore company in the UK as a private limited company. PLC company formation in the UK provides you with the similar advantages as an offshore company, provided that all business is held outside the UK.
The UK jurisdiction is not considered as a traditional offshore, yet it can be used as such. If there is no business performed in the UK, you can enjoy offshore company advantages with your UK company, such as:
- UK nominal services,
- No local taxes for offshore companies,
- Privacy for its members and directors,
- Reputation for being established in the UK.
You can join hundreds of our satisfied clients with offshore company formation uk service purchase. Our company formation services in the UK are more than a formal registration. Ecompany.ltd can provide you with all necessary pre-registration and post-registration services at a high professional level. We ensure your confidentiality.
We think ahead of your requirements. Having registered more than a hundred of companies in the UK, we understand that the current trends among businessmen are to avoid unnecessary expenses and to have a rapid company formation in such a reputable jurisdiction as the UK. To achieve these goals, we always have shelf companies in the UK, including London for rapid registration. We know how to lower fees and how to assist you with accounting.
Our flexible incorporation services include:
- Low fees
- Nominal services
- Registration address in the UK, including London
- Tax and legal services
- Online company formation in the UK
- Formation of plc companies, ltd companies in UK
- Shelf companies in the UK with bank accounts
- Opening a bank account for new companies and shelf companies
- Online accounting services
- VAT registration in the UK
Full support on each step of company transfer and after successful completion of the purchase.
To purchase a ready-made company in the UK and worldwide, please contact us for further details.
It is not required to visit the UK for company incorporation as all procedure is done online. During online company formation in the UK, all registration documents are submitted through the UK Companies House website.
Please feel free to contact us for further details and online company formation services. You can use our website to search for existing company names.
For rapid company formation in the UK, it is advisable to choose a unique company name, to arrange for a registered address and appoint at least one director and secretary. For rapid formations in London it is possible to use nominal services, including registered address in London. Once all sets of registration documents are ready, it can be submitted to the UK Companies House online.
Company formation in the UK is available for residents and non-residents. The set of necessary documents to be submitted for registration is similar for any citizens or residents. However, non-residents are required to translate documents into English with a notary certification, if such documents are in a foreign language.
Ecompany.ltd provides online company formation services in the UK. Our flexible company incorporation services in the UK include:
- Low registration fees
- Nominal services
- Registration address in the UK, including London
- Accounting, tax and legal services
- Shelf companies in the UK with bank accounts
- Opening a bank account
- VAT registration in the UK
To incorporate or purchase a company in the UK or worldwide, please contact us for further details.
London is one of the largest financial cities in Europe. It is prestigious for your company to have an office in one of its business and financial locations. We provide nominal services with registered addresses in London.
For company formation in London, please contact us for further details.
The cost of company incorporation in United Kingdom is Euro.
Online company formation on eCompany.ltd
- You can easily search whether your chosen company name is available for registration in the United Kingdom. To check the name, please enter the company name in a search field under the top banner on this page and then click “find out”.
- If your chosen company name is available, you can start the process of company formation.
- At checkout, please fill in your personal information and account details for account registration. You can add additional notes or information in your order.
- Complete your order with your preferred method of payment.
- Once your payment is processed, we will contact you about the necessary documents that we need to receive from you in order to prepare incorporation documents on your behalf.
- We will prepare the incorporation documents and submit them for company formation in the United Kingdom.
- Once the company is incorporated in the United Kingdom, we will send you a standard set of original corporate documents. Please make sure that you entered your correct mailing address.
If you have any questions or problems at any stage of company formation in the United Kingdom, please feel free to contact us.
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.
A UK tax resident company is qualified as a UK-domiciled, if it is incorporated in the UK and managed within the country. Companies registered overseas can be qualified as UK tax residents if their central management and control are in the UK. The definition on whether a foreign company should be classified as a UK tax resident company is determined in accordance with an applicable tax treaty. In other words, it is not sufficient to be registered in the UK to be tax resident. But it is possible to become a UK tax resident on the basis of actual management and control from within the United Kingdom as per a tax treaty.
The UK business tax year starts from 1 April and ends on 31 March. This is a basic taxable period, as it is allowed to opt for other corporation tax deadlines in the UK. Upon request to the HMRC it is possible to switch the corporate tax filing deadline to another convenient annual period.
Companies submit tax returns in the UK within 12 months of the year end. As a general rule, tax refunds are processed within 21 days after tax returns are accepted.
In the United Kingdom legal entities pay business taxes, such as corporate tax, capital gains tax, construction industry scheme and VAT. In terms of corporate tax, a UK resident company is liable for corporation tax which is levied on its worldwide profits and chargeable gains.
The corporation tax rate in England is similar to the rest of the UK, including Wales and Scotland.
Capital gains tax is another corporation tax which is paid for profit gained as a result of selling a business asset, including land and buildings, fixtures and fittings, shares, registered trademarks, etc.
There are no additional municipal taxes for companies in London or elsewhere in the UK.
The main corporation tax rate is 19%. It is applied for a year of 2020 and it is reviewed from time to time.
The rate of capital gains tax is 18% or 28% in the UK and is paid on profits received from sale of property. Capital gains tax on shares is taxed at the rate of 10% or 20% which depends on the tax band a payer has.
It is possible to get a tax relief from capital gains tax in whole or in part. For instance, there is a entrepreneurs’ relief under which it is possible to pay 10% capital gains tax on qualifying profits for selling all or part of a business. Avoiding immediate payment of capital gains tax is allowed for transfer of the business and its assets in return for shares in the company. Another option is to reduce capital gains for tax allowances in the 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.
All investment income is subject to UK taxation. Investment is regarded as dividends, interest, and rental income.
The UK sets a dividend allowance. In 2020 the dividend allowance equals £2,000. The basic tax rate on dividends is 7.5% in the UK, while the higher rate is 32.5%. The exact rate depends on the income tax band.
Companies are exempt from UK tax on foreign dividends if the UK company is small (as defined in the UK legislation) and the foreign company (payer of dividends) is a resident of a country which has a tax treaty with the UK that has a non-discrimination clause. In this case, no dividend tax is applied to the UK company. The same rules apply to a limited company which is equally released from dividend in the UK tax system.
As a basic rule, non-residents in the UK, pay taxes on income that can’t be more than the amount of tax charged on income. This excludes disregarded income, which can be dividends and interest from UK companies.
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.
VAT registration is mandatory for companies registered in the UK if the taxable turnover is over £85,000 (threshold). If the VAT threshold is exceeded (so, you gain more than £85,000), the company is required to become VAT registered within 30 days. It is possible to get VAT registration on a voluntary basis.
The standard VAT rate within the whole territory of the 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’s 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.
Small businesses in the UK are exempt from VAT if the annual turnover is below £85,000.
To get VAT registration for a UK company it is possible to submit a VAT application online to the HRMC either by yourself or through an agent. In the latter case, the agent will submit VAT Returns and act with HRMC on your behalf.
The GST is called VAT. Please see the VAT section above for exact rates.
Apart from the main rate for all companies, small business is taxed at the rate of 19%. Small profits rate apply to small businesses with profits under £300,000.
The general principles of computation of corporation tax in the UK, is that the tax system should be transparent, fair and easy to be understood. The UK tax system is regarded as one of the most convenient as it has clear policies and is fair for both small and large businesses. For this reason, the UK is regarded as an ideal jurisdiction for company incorporation.
An oversea company is subject to the UK corporation tax only if it performs business in the UK through a PE. The permanent establishment is defined in accordance with a tax treaty or the UK laws.
Similar to the main corporation tax rate as given above, the limited company tax in the UK is currently 19% on company’s profits (minus allowable expenses).
Interest income is not the same as dividend income in terms of the UK tax system. Interest income is received from the interest rate received from bank savings. The UK tax rate on interest income is calculated based on taxable income. As such, there are four rates on savings income which are 10%, 20%, 40% and 50%. Subject to certain exceptions, the rate of withholding tax on interest is 20% in the UK.
The tax liabilities differ for cases whether shareholding is sold entirely or partially. The income derived from the sale and assets gained as a result of the sale are qualified as capital gains. So, the capital gains tax should be paid for income derived from the sale of shares, land and buildings, company’s goodwill, trademarks, etc. The rate of capital gain tax is 10% and 20% depending on the income tax bad. To reduce taxes, it is possible to claim for entrepreneurs’ relief.
All investment income is subject to UK taxation. Investment is regarded as dividends, interest, and rental income. The tax rate on dividends is 7.5%-32.5% in the UK. The exact rate depends on the income tax band.
Company Liquidation in England (UK)
Similar to other parts of UK, a company liquidation in England can be done voluntary or involuntary.
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.
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.
A company’s director, administrator or liquidator may propose voluntary liquidation which is to be approved by company’s members.
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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