Formation of Companies in the United Kingdom (UK)

FORMATION OF COMPANIES IN OTHER JURISDICTIONS
UNITED KINGDOM CORPORATIONS

The United Kingdom, which consists of England, Scotland, Wales and Northern Ireland, lies off the Western Coast of Europe. It has a total landmass of approximately 241,590 sq km.

Principal Corporate legislation
Companies Act 1985(As amended). The Income and Corporation Taxes Act 1988.

Corporate feature

Company formation
LONDON REGISTRY
As long as a client is prepared and able to wait for seven days a "custom-made" new UK company formation may not only be preferable but also more economical. Custom-made companies are set up with a client’s own choice of name (subject to availability) and with the required share capital.

The intended situation of the registered office can be stated from the outset. Clients can be named as the first director and secretary.

Many international clients and UK businesses prefer to have their UK company incorporated in the capital of the United Kingdom - London. This facility is available to our clients and companies can often be incorporated on the same day that instructions are received. The Certificate of Incorporation of such companies shows their place of incorporation as being London. The UK Registrar of Companies levies a nominal additional fee for this service but our experience is that most clients, particularly those involved in international trade and having a registered office in London, take advantage of this exclusive facility. Less than 1% of all companies incorporated in England and Wales are today incorporated in London. Over a decade ago, the principal companies’ registry for England and Wales was moved, by the government, from London to Cardiff, Wales.
Another distinct advantage of incorporation in London is the availability of a same-day incorporation service.

Clients who decide not to incorporate in London will have their company registered at the principal Company Registry for England and Wales in Cardiff (i.e. not England). In such cases the Certificate of Incorporation shows Cardiff not London as the place of incorporation.

In addition, to the companies registry in Cardiff, which covers England and Wales, additional company registries are situates in Edinburgh for Scotland and Belfast for Northern Ireland

Type of company for international trade and investment
Private or Public Limited Company.

Procedure to incorporate
Submission of Memorandum of Association, Articles of Association, Declaration of Compliance and Statement of the First Directors and Secretary and notification of the situation of the Registered Office with the requisite fee to Companies House.

Restrictions on trading
Yes, specified groups, which include for example, banking, insurance, financial services, consumer credit related services and employment agencies.

Powers of company
A Company incorporated in the United Kingdom has the same powers as a natural person.

Language of legislation and corporate documents: English.

Shelf companies available: No.

Time to incorporate
Ten to fifteen working days

Name restrictions
Any name that is identical or similar to an existing company, any name which would be considered offensive or suggests criminal activity, or any name that suggests the patronage of the Royal Family or the Government of the United Kingdom. Restricted names include assurance, bank, benevolent, building society, Chamber of Commerce, fund management, insurance, investment fund, loans, municipal, reassurance, reinsurance, savings, trust, trustees, university or their foreign language equivalents.

Language of name
Whilst the name of company can be in any language, the documentation must be in English. Any name in a language other than English must be accompanied by a translation to ensure that the name is not restricted. However, if the company is incorporated in Wales there is a proviso that documentation in Welsh will be accepted.

Registered office required
Yes, must be maintained in the United Kingdom.

Names requiring consent or licence
All financial services activities such as banking and insurance.

Suffixes to denote limited liability
Limited, Public Limited Company or the relevant abbreviations.

Disclosure of beneficial ownership to authorities: No.

Authorised and issued share capital
Private Company - The minimum issued capital is one share, but further capital is usually issued to reflect the stability and strength of the company. A private company is normally incorporated with an authorised share capital of £ 1,000.
Public Company - The minimum authorised share capital for a public company is £ 50,000 of which £ 12,500 must be paid up (in case of liquidation the full £ 50,000 must be paid). The minimum issued capital is two shares.

Classes of shares permitted
Ordinary shares, preference shares, deferred shares, redeemable shares and shares with or without voting rights.

Bearer shares permitted: No.

Taxation
Taxation is paid by companies in the UK based upon audited accounts, which are submitted to the Inland Revenue at the end of the company’s financial year. A company is free to choose its own year-end. Companies pay capital gains tax and corporation tax at the same rate being 21% where the net profit before tax does not exceed £ 300,000. The tax payable increases thereafter in stages until the net profit before tax reaches £ 1.5 million where the top rate of corporation tax is charged at the rate of 31%.

Double taxation agreements
The United Kingdom is party to more double tax treaties than any other sovereign state.
License fees: None.
Financial statement requirements
All UK Companies are required to file accounts with the Registrar of Companies. There is an exemption given in favour of limited liability companies where they have a small turnover, which is defined as being below £ 350,000. In those circumstances the directors must self-certify the accounts without the requirement to have a formal audit.

Structure of management
Directors
Private Companies - One. They may be natural persons or bodies corporate. They may be of any nationality and need not reside in the United Kingdom.
Public Companies - Two. They may be natural persons or bodies corporate. They may be of any nationality and need not reside in the United Kingdom.

Company secretary
A company secretary must be appointed. The company secretary may be a natural person or a body corporate. They can be of any nationality and need not reside in the United Kingdom.

Shareholders
Private Companies - the minimum number of shareholders is one.
Public Companies - the minimum number of shareholders is two.

Important note: International tax planners are able to utilise UK structures to minimise taxation for international business.