England is a respectable, stable, promising region that has long attracted businessmen from different countries. We propose to discuss what types of companies in this lawfullment are available for registration by non-residents and outline the most weighty thing: what type of company should be chosen when registering a business in the country.
If your first priority is to open a representative office abroad, then the UK will be the best and most profitable solution. The advantages of jurisdiction can be listed for a long time:
- Working in the UK opens up great opportunities in the global market.
- To start – a huge domestic market.
- Attractive location. The UK is a European state.
- Age-old traditions of entrepreneurship. For many years in a row, English law has been steadily protecting business.
- Flexible tax system.
The prestige of the Kingdom is automatically reflected in the English company, its status among international partners.
And since we have smoothly approached the topic of English companies, you should understand that there are some types of companies in the UK. We will try to guide you in the most common forms of ownership. Let’s designate how each of them differs from each other. We will help you choose the best one for solving specific problems that each entrepreneur sets for himself.
Company in the UK – easy to operate
Any company in the UK is ideal in its own way for solving certain problems. Of course, the degree of responsibility of the participants, the procedure for maintaining accounting and reporting, relationships with the tax or registration chamber depend on the choice of the form of ownership. Many questions arise when choosing a particular form of ownership. Let us consider in detail the 5 main organizational and legal structures that businessmen from any country most often choose to establish their own business in the UK.
How many types of companies are there in the UK
In UK there are 5 types of companies:
Company types in the UK
The first type of company in the UK is LTD. It is difficult to unequivocally say that an LTD is better than a limited partnership. No. The fact is that each business framework is attractive in its own way, and most importantly, it is designed for certain tasks.
The essence of LTD is that the responsibility for financial, economic, results of activities, as well as for obligations, is borne by the enterprise itself, and not by the people who founded it. In view of the variety of possible liability, LTDs are of two types:
1.The main characteristics of the company LTD:
Business-companies are governed by the Companies Act 2006. The structure of the company is not limited: there are no residency demands for both the manager and the sharer. Quantity – leastwise one manager and one sharer.
The residence of the director will most likely depend not so much on UK law, but on the successful implementation of your business objectives. So, when an English company conducts business activities on the territory of the world, so as not to fall under the demands of the current legislation on registering a permanent representative office of such a foreign company in Ukraine.
The secretary in the company is not obligatory, in practice it is not appointed.
The minimum authorized capital is also not limited. The standard issued capital is 100 registered shares of £1 each. Bearer shares are prohibited.
The company’s profits are subject to taxation at the rate of 19%.
To enroll a business-company in the UK you need:
- Provide your own version of the company name (3 options).
- Decide on the structure of the business-company: director, number of owners, trustees, distribution of shares, etc.
- Provide legal papers:
- international passport;
- a document confirming the address (an internal passport with a residence permit, or a utility bill issued in the name of the client, or a bank statement indicating the client’s address).
- Registration can be initiated on the basis of scanned copies of documents.
- Provide a description of the business (short): type of activity, main goal, business geography, contacts, website (if any).
The LTD is an individual legal entity and is separate from those who legally own it. This is what is considered by many to be a great profit of this form of ownership. Sharers’ responsibility is restricted to their investment and any unpaid shares they hold. The personal assets of a shareholder will not be exposed to any risk if the limited liability business-company is dissolved.
An LTD is one of the popular business structures in the UK due to its limited liability, potential tax advantages and the ease of operating as a LLC. After the registration of the business-company, information about the history of applications and current appointments is published in the register of the Companies House. This gives LL companies a level of clarity that is seen as a significant benefit when doing business.
A LLC is a joint stock company that can openly sell shares on the stock exchange. There are different types of companies in the UK between PLC and LTD. This business-company may be owned by a private individual. Limited partners may own the shares but not take part in the management. PLC exists as a separate legal entity.
PLCs are generally large companies that have high credibility in business and business circles.
The demands for establishing a PLC include:
- share fund of at least £50,000.
- appointment of at least two directors.
This form of ownership attracts entrepreneurs with the opportunity not to pay income tax. The tax obligations are met by each LLP partner before their jurisdiction, if the partnership did not receive income in the UK.
Like the previous types of companies in the UK, LLP is a separate legal entity. The structure of the firm must have at least two partners who will be responsible for the work of the LLP, but to a limited extent.
This is a limited partnership established in Scotland. SLP is very similar to LLP, but with the main differences:
- The partnership must have at least two partners, one of them is the general one, who fully controls the company’s activities, but in case of bankruptcy can pay with his property. The limited partner risks only the contributions made.
- SLPs are very service friendly and can be a tax planning tool. Namely, if the company does not operate in the territory of the kingdom, but is established by a non-resident, then such a company does not have to maintain and submit reports and pay income tax to the UK treasury.
Types of limited companies in the UK: A limited partnership (LP) is a legally enrolled entity with Companies House. It consists of two or more partners, which may be natural or legal persons. There are 2 types of partners in a limited partnership and they have different roles and responsibilities. Each LP must have at least one general partner and one limited partner.
How to register a company in UK
The UK allows non-residents, non-citizens of the country to open a company remotely. Registration takes a small amount of time. Having decided on the form of ownership, you will need to select the name of the company, provide a description of the future company structure. From the documents enough:
- copies of the passport of shareholders, beneficiaries;
- utility bill as confirmation of the address of residence (the document must be no older than 3 months).
All documents must be translated into English, notarization is required.
What type of company should i form in the UK
And now back to the most important question, which was voiced at the beginning of the article. What organizational and legal form of ownership of companies is the most optimal for registering a business in the UK by a non-resident? Having studied the key characteristics of each of the listed types of company in the UK structures, it should be noted that the answer regarding the choice of a company actually lies on the surface. It is necessary to take into account your requests, the type of activity and the purpose of establishing the company. Whether you do business in the UK as an SLP, LLP, LTD, etc. hinge completely on your individual incident.