Overview About Britian Setting up a Business in Britain Taxation
The United Kingdom is made up of four nation states including England, Wales, Scotland and Northern Ireland, each of which facilitate the incorporation of business entities and the establishment of partnerships through their own registries. The United Kingdom is currently establishing over 200,000 new businesses per annum for residents and overseas citizens.
The team at OCRA (London) Limited is fully conversant and experienced in the procedures for establishing United Kingdom business entities and last year set up over 7,500 companies for businessmen and entrepreneurs.
From inception we will examine and evaluate your business activities and advise you on the most suitable business structure to adopt, which could be either the establishment of a private limited company or public limited company, partnership limited liability partnership or branch registration of a foreign corporation.
We can also provide the following business support services:
Companies in United Kingdom are incorporated (registered) under the Corporations Act, 1985. The Act is overseen and administered by Companies House in Cardiff, Wales.
A United Kingdom company is usually incorporated as either a Private or Public Company. (There are also specialist companies such as companies limited by guarantee for clubs, associations and charities)
OCRA London is able to provide all such companies.
The majority of companies are those limited by shares, with members or shareholders who hold one or more shares issued to them by the company in return for payment. Although most shares are fully paid and the shareholder has no liability for the company's debts, a shareholder's liability to the company's creditors is normally limited to the amount of any shares that have been issued to them and which they have not fully paid for.
Prior to the 1985 Companies Act, the only way that a company could offer its shares to the public to raise capital was by admission to one of the official stock markets.
This was limited to a relatively small number of substantial companies that excluded the small to medium-sized enterprise in need of capital. The 1985 Act created the PLC and made the procedure to acquire public company status much simpler.
The advantages in acquiring PLC status may for some be a matter of image, but for most a need to be legally entitled to offer shares to investors, subject to regulatory approvals.
A PLC must have an issued share capital of not less than fifty thousand pounds of which a minimum of 25% must be fully paid up. Shares cannot be issued for an undertaking to do work or perform services; payment for shares may only be by 'cash' or a 'non cash' consideration. The latter method would normally be in respect of a property or other tangible asset and completed within 5 years of allotment. A PLC is not obliged to float its shares or offer them for sale, and it can remain as private as the shareholders wish and as with private limited companies if the shares have been fully paid there is no shareholder liability. A PLC enjoys increased status because of the larger capital base. A PLC requires two shareholders and two directors (at least one director must be an individual). A qualified company secretary who usually undertakes the administrative duties of the company must be appointed. A company registered as a public company on its original incorporation cannot commence business or exercise its borrowing powers unless the Registrar has issued it with a certificate of entitlement to do business and borrow (the trading certificate) which normally takes approximately two weeks to process.
A guarantee company has members, rather than shareholders, whose liability is limited by an amount, normally less than a £1, guaranteed by each member, which becomes due in the event of the company being wound up. The Memorandum includes a non-profit distribution clause and these companies are usually formed by professional, trade or research associations. After incorporation the company can be registered with the Charity
A flat management company has its Memorandum and Articles of Association specially drawn up to allow the company to own, manage and administer a freehold property, which is normally divided into several dwelling units or flats, with each leaseholder owning a share in the company. The leaseholder will be obliged to transfer this ownership of the share to the new leaseholder when disposing of the property.
A limited liability partnership is a new form of legal business entity with limited liability.
The main features of limited liability partnerships are that they have organisational flexibility but are taxed as partnerships. In many other respects they are very similar to companies.
The Limited Liability Partnership Act 2000 generally allows two or more persons carrying on a lawful business with a view to profit to form a limited liability partnership by subscribing to its incorporation document – Form LLP 2. (In law, 'person' includes individuals and companies.)
However, limited liability partnership must at all times have at least two, formally appointed designated members. (Designated members are analogous to the executive directors and the company secretary of a company). The designated members are responsible for:
Designated members are liable in law for failing to carry out these legal responsibilities. If there are fewer than two designated members then every member is deemed to be a designated member. (The limited liability partnership may have been decided that all members will be designated members or that only some members will be designated).
With the agreement of the other members, a member may become a designated member at any time. Designated members enjoy the same rights and owe the same duties towards the limited liability partnership as any other member. These mutual rights and duties are governed by the limited liability partnership agreement and the general law. However, the law also places additional responsibilities on designated members.
An overseas company may register itself in United Kingdom to operate as a branch, in lieu of incorporating a wholly owned United Kingdom subsidiary. To do so various application forms need to be lodged with Companies House and annexed to them must be certified copies of the company's current certificate of incorporation and other prescribed documents.
The company must file with the Companies House each year its annual accounts and comply with other reporting requirements, such as changes in its directors and registered office in the country of incorporation.
A formal register of company and business names was abolished in the early 1980's.
You can incorporate a company with any name unless it is considered undesirable by the Registrar.
The following words require special consent: Bank, Building Society, British, National, International, Group, Holding, Chamber of Commerce, and any word that may indicate connection with Royalty or Government. Names will not be registered under the Companies Acts where it is the same as that of an existing company.
Another company or trader may object if the name confuses the public as to the identity of the party using it, or is in some other way in breach of the complainant's legal rights.
These are the rules and regulations that form the legal basis for the conduct of a company both with third parties and amongst their own shareholders and directors.
The Memorandum of Association must state the name of the company and whether the registered office is situated in England, Scotland, Wales or Northern Ireland. They include the amount of the authorised share capital, the classes of shares and the number of shares that are to be registered. The Articles of Association govern the internal affairs of the company.
The registered office is the place where the company's statutory records are maintained, available for inspection and is the address where documents can be served if necessary.
It need not be where the company will carry out its business, but every company registered in the United Kingdom must have its registered office in the United Kingdom.
The Companies Act requires companies to maintain various records and registers of their accounting and administrative transactions. It is usually the secretary (if one is appointed) who carries out such tasks.
The Companies Act also requires certain documents to be filed at Companies House from time to time so that an up-to-date record of the company's affairs is available for inspection by the public. Every company must lodge an Annual Return in which a director or secretary of the company confirms relevant details of the company for the public register including names and addresses of all directors, registered office address and details of shareholders and their shareholdings.