Incorporations in the UK

The United Kingdom of Great Britain and Northern Ireland is a sovereign state. UN Member since 1945. Member of the British Commonwealth.

Legalization of Documents under International Law: for the countries that are signatories to the Hague Convention documents are legalized by apostille. For any other countries there is an option for consular legalization by embassies of these countries.

Private Company Limited by Shares

Private companies limited by shares are registered under the Companies Act, 1985.

A company name must be composed only of Latin letters and it must contain extension indicating its limited company status: Limited, Ltd.

A UK company may carry on different types of business. Authorized capital of a UK company may be denominated in GBP, USD and EUR. The amount of fixed license fee depends on the amount of the company authorized share capital. The deadline for license fee payment is the anniversary of incorporation. Apart from the fee payment, the company must also submit to the Companies House an Annual Return on its current status reflecting its Directors, Shareholders and Registered Address.

Audit: a UK company must be audited on annual basis. Companies with a turnover of less than GBP 5,600,000.00 may submit a balance statement instead of audited accounts. For more details please refer to our Reporting and Audit page..

Directors: a company must appoint at least one director who is an individual. There are no restrictions applicable to directors’ nationality. The register of directors is open for public (and is kept with the Companies House).

Secretary: since 2008 there is no obligation for a company to appoint a secretary.

Shares: a private company limited by shares may only issue registered shares. A company business is deemed started once this company has issued at least one share. A Register of Shareholders is open for public (the data are kept with the Companies House). The minimum number of shareholders is one – either a legal entity or an individual.

Limited Liability Partnership

Another type of company often incorporated is a Limited Liability Partnership (LLP). LLPs must have at least two owners – either individuals or legal entities, with no restrictions applicable to nationality or country of incorporation. Requirements concerning audit and reporting are the same as for other types of companies. The principal difference is that an LLP is not deemed as separate taxpayer and its income is automatically treated as income received by its owners who must pay taxes accrued thereto in the country of their tax residence. Consequently, in case the owners are not UK tax residents and the partnership does not operate in the UK, such partnership shall not have any tax obligations in the UK.

The UK has signed Double Taxation Treaties with the following countries: Antigua and Barbuda, Argentina, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bolivia, Botswana, Brunei, Bulgaria, Burma, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Falkland Islands, Fiji, Finland, France, Gambia, Germany, Ghana, Greece, Grenada, Guernsey, Guyana, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Ivory Coast, Jamaica, Japan, Jersey, Kazakhstan, Kenya, Kiribati, Kuwait, Latvia, Lesotho, Luxembourg, Macedonia, Malawi, Malaysia, Malta, Mauritius, Mexico, Mongolia, Montserrat, Morocco, Namibia, Netherlands, Nigeria, Norway, Oman, Pakistan, Papua New Guinea, New Zealand, Philippines, Poland, Portugal, Romania, Russia, St.Christopher (St.Kitts)-Nevis, Sierra Leone, Singapore, Slovak Republic, Slovenia, Solomon Islands, South Africa, South Korea, Spain, Sri Lanka, Sudan, Swaziland, Sweden, Switzerland, Thailand, Trinidad and Tobago, Tunisia, Turkey, Tuvalu, Uganda, Ukraine, USA, Uzbekistan, Venezuela, Vietnam, Zambia, Zimbabwe, Yugoslavia.

LAWYER’S COMMENT:

A UK company limited by shares is not an offshore and it is generally looked as a reliable business partner in international business relations. However, there is an option to legally decrease tax deductions to appropriate amounts and to effectively use such a company for international business purposes.

A company is automatically registered for the tax purposes with Inland Revenue Service (no application is required) within 3-4 months from the incorporation date.

It is also worth mentioning that the recommended scheme involving a UK company acting as agent on behalf of an offshore company and receiving a commission fee or interest for its services is not the best option from the point of view of the UK auditors and tax authorities.