United Kingdom Company Incorporation Guide

Introduction

The United Kingdom (UK) is a popular destination for international companies looking to establish a local operation. If you’re planning on setting up a team in the UK as part of your global expansion journey, you’ll need to work through the process of establishing a local company. This UK company incorporation guide serves as an introduction to common considerations and steps.

Company Types

Foreign companies setting up a legal entity in the UK can choose between different types of entities, including limited companies, branches, and partnerships.

Limited Company: A Limited Company in the UK is a privately held small business entity and considered as an independent legal entity on incorporation. It can have a minimum of one and a maximum of fifty shareholders. Limited Companies cannot publicly trade its shares. It can have a minimum of one director.

Branch: Foreign companies engaged in manufacturing and trading activities abroad can set up a Branch in the UK. A branch is not a separate legal entity from its parent company and can be held liable for the debts of its parent company.

Partnership: A new business entity created through a partnership between foreign and UK investors, in which the partners jointly share the profits, losses, management responsibilities, and operation expenses. The advantages of partnerships are that the foreign company can utilize the well-established contact network, distribution, marketing channels, and the available financial resources of the UK partner. A partnership also offers the investors to jointly manage the risks involved with the new business and limit their individual exposure by sharing the liabilities.

Incorporation Requirements

Paid up capital: In the UK, there is no minimum paid-up capital requirement for setting up a company.

Foreign Percentage Ownership: Foreign companies can set up a wholly owned subsidiary in the UK. Once a company has been duly registered and incorporated as a UK company, it is subject to UK laws and regulations as applicable to other domestic UK companies.

Local Director: The UK does not require a local director. Companies can appoint directors from anywhere in the world.

Corporate Secretary: The UK does not require a Company Secretary. However, if the company decides to appoint one, the Company Secretary can be from anywhere in the world.

Office: Local office or a virtual office capable of accepting letters/post is mandatory before incorporation. The local office address acts as the Registered office of the entity in the Incorporation documents.

Complete Legal Paperwork

In order to register a company, a legal firm, corporate secretary, or corporate service provider will assist with the preparation of company incorporation paperwork. This will include articles of incorporation, constitution, first AGM meeting, share certificate, member consent forms, consent to act as director, and other legal documents to support the incorporation. The provider will then continue to manage any new company resolutions that are required over the course of the company lifecycle.

Documents

The following documents are required for company registration in the United Kingdom:

• Form IN01– This application form requires details like:
• Proposed company name
• Official place of business address
• Type of company structure (private/public/unlimited)
• Details on the type of business activities
• Choice of Articles of Association
• Details of proposed director/s and company secretary (if needed)
• Details of people with significant control (PSC)
• Residential addresses of director/s
• Statement of capital and initial shareholdings
• Statement of compliance/ guarantee
• Memorandum of Association

Company Incorporation

Once the legal paperwork has been executed, the service provider will provide a copy of the official certificate of incorporation issued by the Companies House. In the UK, Companies House maintains a website portal to manage the company account information.

File Mandatory Registrations

Once the company paperwork has been completed and the company registered, it will be assigned a Unique Taxpayer Reference (UTR) number. With the UTR Number, they can begin the process of registering with the required UK agencies. These includes:

VAT: Value Added Tax

PAYE: Pay As You Earn

Industry specific license

Setup Bank Account

The final step is to establish a bank account with a local bank. The UK has a well-developed banking industry but still suffers from bureaucracy and legacy solutions. The process of establishing a bank account can be an unexpectedly long process that many companies do not sufficiently plan for. This can include extensive application documents, KYC documentation, and in-person signatures. Common local banks in the UK include HSBC, Standard Chartered, Barclays and Lloyds.

This article does not constitute legal advice.