United Kingdom Entity Setup

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.

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.

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.

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

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.

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

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.

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.

Unlike other countries, there is no reservation of the proposed company name for the UK’s incorporation. The proposed company name must be submitted along with all the relevant documents needed. However, you can check if the proposed name has not been registered here.

In the UK, the incorporation process can be done on 3 different platforms. For each platform, the timing differs. (1) Electronic Software Filing: Done usually be external services that have their own websites to help with incorporation. The standard fee for this platform is £10 and usually takes 24 hours. (2) Web Services: The easiest online, one-stop platform to register your company with Companies House and HM Revenue and Customs (HMRC). The standard fee for this platform is £12 and usually takes 24 hours. (3) Paper Filing: The only physical platform to incorporate your company. The documents must be submitted to the correct offices and therefore, will take a longer time. The standard fee for this platform is £40 and usually takes 5 working days.

Form IN01, Articles of Association, Memorandum of Association and additional company information to be completed.

Companies House is a government section within the Department for Business, Skills and Innovation. It deals with the regulation and incorporation of limited liability partnerships and limited companies in the UK. As the official registrar of companies in the UK, they function in three separate countries: Northern Ireland, Scotland, and England and Wales.

The final step is to decide the bank to work with. The United Kingdom has world class banking infrastructure that startups and hyper growth companies alike benefit from. 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, notarized director documents, KYC documentation and in person signatures. Common local banks in the United Kingdom include Barclays, Standard Chartered, Lloyds, and HSBC.

The national taxing authority of the United Kingdom that collects all direct and indirect taxes and administers benefits and tax credit payments to residents.

You must register if: (1) your total VAT taxable turnover for the last 12 months was over £85,000 (the VAT threshold) (2) you expect your turnover to go over £85,000 in the next 30 days.

This is the system your employer or pension provider uses to take Income Tax and National Insurance contributions before they pay your wages or pension.

National Insurance is a tax paid by most workers. If you are a pay-as-you-earn (PAYE) employee, National Insurance contributions (NICs) will automatically come out of your wages – just like Income Tax. If you are self-employed, you will probably pay NICs through your yearly self-assessment tax return. 

A workplace pension scheme is a way of saving for your retirement through contributions deducted direct from your wages. Your employer may also make contributions to your pension through the scheme. If you are eligible for automatic enrollment, your employer has to make contributions into the scheme.