Company registration in United Kingdom
No limit for registered capital
No requirement for local partnership
Complete foreign ownership allowed
Joint venture registration is allowed
United Kingdom market entry strategy
The United Kingdom of Great Britain and Northern Ireland is always an attraction for business/trading entities. It is a favourite destination for office locations across the globe because of its well-equipped infrastructure, basic and fundamentals facilities, strong governance and well-implemented rules and regulations. To give the global presence to the company, it is necessarily required to have a place in the United Kingdom.
No citizenship is required before opening a company in the United Kingdom. Although there are some restriction on non – resident before opening a limited liability company.
Days are gone where one has to engage in tedious paperwork, wait months for approval and pay a handsome price. Now in the internet era, every step of company registration can easily be done online.
Business Structure in the United Kingdom
There are several business configurations in the UK but the most common ones are discussed below:
1. Sole Proprietorship
Formation of the sole proprietorship is an easy and simple task. However, the liability of the owner is unlimited i.e. he will be held liable for all the business’s debt. The owner can efficiently trade under his own name or another name. If he wants to select another name then the registration of the name is not mandatorily required.
In Sole Proprietorship, owners are required to pay an income tax on profits by sending Self – Assessment tax return annually. If the Vatable Turnover is over £85,000 then the sole trader has to pay VAT otherwise he has the option to omit it
For formation of a partnership, it requires two or more partners. The partnership is generally used for small and family-owned business. It is the simplest form of business configuration to run a business.
Decide the partnership name, choose a designated partner and register with His Majesty Revenue and Customs (HMRC) Department. Nominated/Designated Partner is solely responsible for managing the partnership’s tax returns and keeping all the business records. The rest of the partners are required to register separately by 5 October in business’s second tax year, failing this they will be charged a penalty.
Companies Act – 1985 and Income & Corporation Taxes Act – 1988 will govern the policy of company registration in United Kingdom. English is the official language of legislation and corporate documents. A company incorporated in the United Kingdom has the same power as a Natural Person.
Steps for Company Registration in United Kingdom
There are basically four types of company that can be registered:
- Private Companies (Limited by Shares)
- Private Companies (Limited by Guarantee)
- Private Unlimited Company
- Public Limited Company
Let’s have a look at the steps of company registration in the United Kingdom as stated in Companies Act, 1985 read with corresponding rules and applicable laws
- Select the suitable name for the company
- Mention the address of the company
- Name and Details of at least one director
- Details of the company shares
- Standard Industrial Classification of Activities (SIC) Code
- Draft the Memorandum of Association (MoA) and Article of Association (AoA)
- Details of people with significant control over the company
Above mentioned details and documents is the prerequisite for any company registration in United Kingdom.
After incorporation details
After completing the process of company registration, the person will receive “Certificate of Incorporation” (COI) in which the company registration number and its date of incorporation will be mentioned. COI will give the assurance of company being legally formed and incorporated. The Registration of Corporation Tax should be done mandatorily within 3 months of beginning the business. A 10 digit Unique Taxpayer Reference (UTR) code along with company details such as company’s registration number, dates of first accounting period will be required before proceeding for corporation tax registration. These details are to be submitted with the HMRC, who will then provide the corporate tax number on the basis of which annual corporation tax returns will be submitted.
This is a brief of the company incorporation process in the United Kingdom. The United Kingdom has always been in the spotlight with different corporate and non-corporate issues due to which people all across the globe wish to be here at any cost. The UK has surely managed to emerge as one of the most popular office destinations despite its few loopholes.