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Company incorporation in the United
Kingdom |
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The Principal Corporate
Legislation is Companies Act 1985 (amended), and the Income and
Corporation Taxes Act 1988. English is the language of
legislation and corporate documents. |
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The types of company
used for international trade and investment are Private or
Public Limited Companies. A company incorporated in the United
Kingdom has the same powers as a natural person. There are no
specific laws relating to the unauthorised disclosure of
information about a UK company, its directors or owners, but UK
law recognises the common law duty that professionals have
towards their clients to keep their affairs confidential. |
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This notes sets out the
requirements for the incorporation of private limited companies,
public limited companies and un-limited companies. The note
refers to the major differences between types of company, the
documents required for their formation, shareholders, capital
and officers and secretary. It does not look in detail at the
question of company names. Certain words under English law
suggest a particular thing and some names are proscribed from
use unless the company is involved in a particular activity. |
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There are restrictions
on trading and business activities: specified types of service,
including for example banking, insurance, financial services,
consumer credit-related services and employment agencies, are
not permitted. |
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Incorporation procedure
requires the submission of the Memorandum and Articles of
Association, Declaration of Compliance and Statement by the
First Directors and Secretary, notification of the location of
the Registered Office and payment of the requisite fee to
Companies House. A registered office must be maintained in the
United Kingdom. For the purposes of this information sheet a UK
company is incorporated in England or Wales and registered in
Cardiff, Wales. Details on incorporating a company in Edinburgh,
Scotland or Belfast, Northern Ireland are available on request.
Off-the-shelf companies are available. |
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London Registration:
Many international clients and UK businesses prefer to have
their UK company incorporated in London. The UK Registrar of
Companies levies a nominal additional fee for this service, and
clients often take advantage of this exclusive facility. However,
less than 1% of all companies incorporated in England and Wales
are today incorporated in London. Over a decade ago the
government moved the principal Companies’ Registry for England
and Wales from London to Cardiff in Wales. |
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Another distinct
advantage of incorporation in London is the availability of a
same-day incorporation service. |
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Clients who decide not
to incorporate in London will have their company registered at
the principal Companies Registry for England and Wales in
Cardiff. |
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In addition to the
Cardiff Registry, which covers England and Wales, there are also
company registries in Edinburgh for Scotland and Belfast for
Northern Ireland. |
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Company names are
subject to the following requirements and restrictions: |
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Although the name of company can
be in any language, 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.
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Any name that is identical or
similar to that of an existing company is not acceptable.
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Any name considered to be
offensive or suggesting criminal activity is not acceptable.
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Any name that suggests the
patronage of the Royal Family or the Government of the United
Kingdom is not acceptable.
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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.
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Any company name implying
financial service activities such as banking and insurance
require consent or licence.
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Limited (Ltd) or
Public Limited Company (PLC) are the required suffixes to
denote limited liability.
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A Private Company
must have at least one director, and a Public Company
must have a minimum of two directors. A sole director cannot
also be company secretary. The directors can be natural persons
or bodies corporate. They may be of any nationality and need not
reside in the UK. If there is more than one director, one of
them can also be company secretary, but as UK Company Law is
complex, it is recommended that a professional secretary with
relevant experience be appointed. Details of the directors
appear on the public file, but anonymity can be maintained by
the use of third party professionals. |
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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. |
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For Private
Companies the minimum number of shareholders is one, for
Public Companies the minimum number is two. A shareholder
may be a corporate body or an individual. Details of
shareholders appear on public record but anonymity may be
retained by the use of nominee shareholders or holding companies. |
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New Companies |
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Under United Kingdom
law there are four types of company that can be registered. |
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Private companies limited by
shares – the liability of any share holder cannot be more than
the amount that is unpaid on shares held by them. When shares
are issued, there are a certain number of shares in any
company. There is a particular face value on each share and,
say 100 shares comprise the share capital of the company. Two
may be issued and fully paid up and a balance of 98, namely
£98 is the extent of the liability in relation to the company.
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Private Company Limited by
Guarantee – the liability of any members/shareholders is
limited to the amount that they have agreed to contribute to
the company's assets if it is wound up. This type of company
is generally only used for charitable work and cannot be used
as a company trading for profit.
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Private Unlimited Company – this
is a private company with no limit as to members liability.
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Public Limited Company (plc) –
the shares in a plc may be offered for sale to the general
public but the liability of shareholders as with private
limited companies cannot exceed the amount unpaid on shares
held by them.
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Requirements relating
to authorised and issued share capital depend on the type of
Company: |
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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.
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Public Company: the
minimum authorized 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.
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The following classes
of shares are permitted: ordinary shares, preference shares,
deferred shares, and redeemable shares and shares with or
without voting rights. Bearer shares are not permitted. |
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Annual Taxation and Fees |
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Tax is paid by
companies in the UK based on audited accounts submitted to the
Inland Revenue at the end of the company’s financial year.
International tax planners are able to utilise UK structures to
minimise taxation for international business. The United Kingdom
is party to more double tax agreements than any other sovereign
state. The UK has signed double taxation agreements with 100
countries and thus enjoys the most extensive double taxation
agreement network in the world. There are no licence fees. |
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It is important to
emphasise that corporation tax rates are the lowest in the
European Union. Tax is levied at 20% on a UK company that has
net profits under £300,000, and a tax rate of 30% is levied
where the profits are over this figure. |
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Requirements for Financial Statements are as follows: |
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All UK Companies must file accounts with the Registrar of
Companies. Generally a Company must appoint an auditor, and
audited accounts must be filed with the Companies Registry. In a
large number of cases companies with sales of under £90,000 are
exempt from this requirement and those with turnover of less
than £350,000 need only produce abbreviated accounts with a
special accountant’s report.
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Registration of a UK company (private and public
limited) can take up to 5 working days. Our standard package
will include a Company Secretary, Registered Office Address,
Certificate of Incorporation and Memorandum and Articles of
Association.
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Fast Track registration
providing the standard services above within 24 hrs.
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Limited Liability Partnership.
The LLP can provide the organisation and flexibility of a
partnership to what is in effect a legal business entity with
limited liability.
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Original documentation will be
sent to the client or they may be retained at the company
secretary's office. An Apostil of documents stamped by the
Foreign and Commonwealth Office may also be provided at extra
cost.
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DHL to THE client.
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