SPS Legal
COMPANY FORMATION IN THE UNITED KINGDOM
The United Kingdom is one of the largest financial and cultural hubs in the modern world. Having a business here is prestigious and reputable. Many mistakenly believe that the country is considered an offshore zone, but this is not the case. England and Wales, and Scotland are low-tax jurisdictions. The specifics of local legislation allow for significant optimization of financial flows outside the country. The United Kingdom comprises three jurisdictions: England and Wales, Scotland, and Northern Ireland. SPS Legal offers company registration in England and Wales, and Scotland. Each of these jurisdictions has its own advantages and disadvantages.
Company registration in the UK with SPS Legal is possible in the following corporate forms:
Company registration in the UK with SPS Legal is possible in the following corporate forms:
- Private company limited by shares (LTD), England and Wales
- Limited liability partnership (LLP), England and Wales
- Limited partnership (LP), England and Wales, Scotland
- EUR 500Cost of LTD company registration in England and Wales
- 1-5 daysAverage time to register a company after filing documents
- EUR 400Cost of renewal of the company for the next year in case of maintenance
- 0-19%Income tax rate depends on the activity and the source of income
IMPORTANT INFORMATION ABOUT JURISDICTION
Corporate forms, director requirements, taxation, formation procedure, reporting requirements in the United Kingdom
LTD (Limited Company)
For an LTD, it is required to have an office in England (we provide correspondent address services in London). In business practice, the most common authorized share capital is £1,000 (payment of share capital is optional). An LTD can be registered with at least one shareholder (individual or corporate entity) and one director (individual). The same person can serve as both the director and the shareholder.
Important: In England, there is a public register of shareholders and directors, and this information is publicly accessible.
Taxation
An LTD becomes a tax resident from the moment of its registration. Corporate tax is paid on a territorial basis, meaning that if a company is registered in England, it is liable to pay tax on profits earned both in England and abroad. Starting from April 2023, the corporate tax rate is 25% for companies with profits above £250,000. For companies with profits up to £50,000, the rate remains 19%, with a marginal rate applying to profits between these thresholds. The VAT (Value Added Tax) rate in England remains at 20%.
It is important to note that the UK continues to maintain a wide network of double taxation treaties (DTTs) with other countries, allowing companies to reduce their tax burden when conducting international activities.
Important: In England, there is a public register of shareholders and directors, and this information is publicly accessible.
Taxation
An LTD becomes a tax resident from the moment of its registration. Corporate tax is paid on a territorial basis, meaning that if a company is registered in England, it is liable to pay tax on profits earned both in England and abroad. Starting from April 2023, the corporate tax rate is 25% for companies with profits above £250,000. For companies with profits up to £50,000, the rate remains 19%, with a marginal rate applying to profits between these thresholds. The VAT (Value Added Tax) rate in England remains at 20%.
It is important to note that the UK continues to maintain a wide network of double taxation treaties (DTTs) with other countries, allowing companies to reduce their tax burden when conducting international activities.
LP (Limited Partnership)
For an LP, it is also required to have an office in England. Additionally, at least two partners (individuals or corporate entities) are required. The nationality and residency of the partners are not relevant. Notably, limited partnerships (LPs) in England and Wales are not required to file an annual report.
Taxation
A limited partnership (LP) itself is not a taxable entity in England. The profits of the LP are distributed among its partners, who are required to pay taxes in their country of tax residency. If the partnership has foreign participants and does not conduct any business in England, there are no tax obligations in the UK.
It is important to note that the UK has a large number of double taxation treaties (DTTs) with other countries, which should be taken into account for tax planning purposes.
Taxation
A limited partnership (LP) itself is not a taxable entity in England. The profits of the LP are distributed among its partners, who are required to pay taxes in their country of tax residency. If the partnership has foreign participants and does not conduct any business in England, there are no tax obligations in the UK.
It is important to note that the UK has a large number of double taxation treaties (DTTs) with other countries, which should be taken into account for tax planning purposes.
UK COMPANY FORMATION PROCEDURE
Procedure for Establishing an LTD
b. Company structure (director, shareholder, beneficial owner, attorney);
c. Authorized share capital and distribution of shares among shareholders;
d. Type of company activity (SIC code).
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Procedure for Registering a Limited Partnership (LP)
b. Structure (general partner, limited partner);
c. Capital amount and contributions of each partner;
d. Type of partnership activity.
- Before registering a company, the following must be determined:
b. Company structure (director, shareholder, beneficial owner, attorney);
c. Authorized share capital and distribution of shares among shareholders;
d. Type of company activity (SIC code).
- Documents required for directors/shareholders/beneficial owners/attorneys: a copy of the passport with the registration page, and documents proving the address (utility bill).
- Submission of the company registration application.
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Procedure for Registering a Limited Partnership (LP)
- Before registering, the following must be determined:
b. Structure (general partner, limited partner);
c. Capital amount and contributions of each partner;
d. Type of partnership activity.
- Documents required for partners: a copy of the passport with the registration page, and documents proving the address (utility bill).
- Submission of the partnership registration application.
UK company registration timeline
The registration period for a new LTD company is approximately three business days.
The set of documents provided to the client after company registration in England includes:
The set of documents provided to the client after registration includes:
The set of documents provided to the client after company registration in England includes:
- Certificate of Incorporation,
- Articles of Association,
- Memorandum of Association,
- Minutes of the First Meeting,
- Resolution of Shareholders,
- Share Certificate,
- Apostille of documents (upon request),
- Company seal (upon request),
- Power of Attorney (upon request).
The set of documents provided to the client after registration includes:
- Certificate of Registration,
- Partnership Agreement,
- Resolution of Members,
- Minutes of the First Meeting of Partners.
Reporting Requirements for Companies in the United Kingdom
Annual Accounts (Statutory Financial Statements):
- Every company registered in the UK must prepare and file annual accounts with Companies House and HMRC(Her Majesty's Revenue and Customs).
- These accounts include the balance sheet, profit and loss account, and other financial details.
- Filing deadlines:
- For private limited companies (LTD), accounts must be filed 9 months after the financial year ends.
- For public companies, the deadline is 6 months after the financial year ends.
- The company must file a Confirmation Statement with Companies House at least once a year. This document confirms the registered details of the company, including directors, shareholders, registered office address, and share capital.
- Filing deadline: The confirmation statement must be submitted within 14 days of the anniversary of the company’s incorporation or the previous statement.
- Every company must file a Corporation Tax return with HMRC. The return reports the company's taxable profits and corporation tax due.
- Filing deadline: The return must be filed 12 months after the end of the accounting period.
- If the company is VAT-registered, it must submit regular VAT returns, typically every 3 months. These returns report the VAT charged on sales and the VAT reclaimable on purchases.
- Filing deadline: VAT returns are due one calendar month and 7 days after the end of the VAT period.
- If the company has employees, it must operate PAYE, which includes filing monthly payroll returns and paying income tax and National Insurance contributions (NICs) to HMRC.
- Filing deadline: Monthly or quarterly depending on the company size.
- Certain companies are required to have their accounts audited by an independent auditor. Companies that meet at least two of the following criteria are exempt from auditing:
- Annual turnover not exceeding £10.2 million
- Assets not exceeding £5.1 million
- Fewer than 50 employees
- Companies must keep a PSC Register, listing people who have significant control (generally more than 25% of shares or voting rights). This information must be included in the confirmation statement and updated when changes occur.
UK company maintenance conditions
Annual Maintenance Includes:
- Expenses for the registered office address,
- Administrative services provided by a professional agent (annual compliance),
- Costs for nominee services,
- Assistance in preparing the annual report (audit not required),
- Annual renewal of the company.
OUR SERVICES FEES
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FAQ
Answers to the most common questions about incorporating a company in the UK
Client:
Can I incorporate a company anonymously?
Consultant:
No, we are in any case obliged to obtain details of the person who will control the company, as well as the shareholders and directors.
Client:
What documents do I need to register a company?
Consultant:
In order to register a company, we require a Know Your Customer (KYC) procedure. In most cases, as part of this procedure, we require proof of identity, proof of residential address, and a bank account certificate. In some cases, we may also require a criminal or criminal record certificate, a CV, a copy of a university degree and other documents that include, but not limited to:
1. Company Name:
1. Company Name:
- Proposed name for the company (should be checked for availability).
- These documents outline the company's internal management rules and regulations, including the responsibilities of directors, how decisions will be made, and the rights of shareholders.
- The specific form to register the company, which varies by jurisdiction, often called Form IN01 in the UK or equivalent in other countries.
- A valid address in the country where the company will be registered. This can often be a correspondence address (some jurisdictions require a physical office).
- Names, addresses, and identification documents (passports, IDs) of all directors.
- Names, addresses, and identification of all shareholders (individuals or corporate entities). Some jurisdictions also require the number of shares and percentage of ownership for each shareholder.
- In some jurisdictions (like Hong Kong), a company secretary must be appointed, and their details should be provided.
- Information on the company’s share capital, including the number of shares, types of shares, and the value of each share.
- Copies of identification documents (passports, national ID cards) for directors, shareholders, and company secretary.
- Proof of residential address (such as utility bills or bank statements).
- Signed consent from directors and shareholders agreeing to their appointment and their roles within the company.
- Some jurisdictions require a declaration of the company's beneficial owners to ensure transparency and compliance with anti-money laundering laws.
- Some countries may ask for bank reference letters for the shareholders or directors, particularly in offshore jurisdictions.
- If the company is being registered on behalf of someone, a power of attorney may be required, authorizing the person or agency handling the registration process.
- In certain countries, companies are required to obtain a tax identification number during registration.
Client:
What else is needed to register a company?
Consultant:
We need 3 options of the company name to check the availability of the name, information and documents for each shareholder and director, the intended type of activity of the company and the required legal form.
Client:
I don't know in which country and in what form it is best for me to register a company, is there some universal option to deal with the whole world?
Consultant:
Simply schedule a free consultation with us and we will be happy to help you find the most appropriate option. There is no universal jurisdiction for dealing with the whole world and it will require a clear identification of the countries where potential clients and counterparties of the company are located.
Client:
How long does it take to form a company?
Consultant:
The timing of company formation depends on the legislation and the quality of work of the state authorities of the country of incorporation. Sometimes the timeframe may be further extended due to compliance (verification) of the applicant. Please note that the timeframe for incorporation is calculated from the moment when the client sends all the required data to the lawyers to prepare the documents for the establishment of the company.
Client:
What is the difference between a shareholder and a beneficiary? Who is a nominee director or shareholder?
Consultant:
A shareholder is a person who is shown as the owner of a share or shares in a company and can claim dividends. Beneficiary is the person who actually controls the company and in whose interests it derives its profits. Often, the beneficiary and the shareholder are the same, but sometimes the real beneficiary of the company may employ special people (in jurisdictions where this is allowed) - nominee shareholders and directors who will perform all tasks on behalf of the beneficiary as if it were their own. In some countries, nominee shareholders and directors work on a professional basis and are licensed by state authorities. The presence of a nominee shareholder or director does not mean anonymity of the beneficiary's activity and often information about him/her is also transferred to the state authority, but these services are still used, for example, to hide from public access information about the real owner of the company, while maintaining transparency before state authorities and banks.
Client:
If I open an offshore - can I not pay taxes or file financial reporting?
Consultant:
No. In many cases, you will be required to pay taxes and fees that are determined by the jurisdiction. In other cases, your tax may be 0%, but this will not relieve you of the obligation to file company reports. In some countries, registering a company offshore still requires the beneficiary to pay taxes under the controlled foreign company rules.
Client:
Is registering a foreign company generally legal?
Consultant:
Yes, of course, the company is registered in accordance with the laws and requirements of the chosen jurisdiction. In most cases, there are no special restrictions on the registration of a company by a foreign national. However, it should be borne in mind that the country of residence and citizenship of the person registering the company may have rules on notification of participation in foreign legal entities and other legal requirements, which may also impose sanctions for non-compliance with legal requirements.
Client:
What's the difference between residency and citizenship?
Consultant:
In general terms, citizenship is determined by the passport of the country whose laws and taxation regime its citizen undertakes to abide by, and in which he may also have the rights that this state will provide him. It may also be subject to the restrictions of other states related to the country of his citizenship. Residency may vary. For example, tax residency in another country may exempt a person from paying taxes in his country of citizenship. Residency can also be temporary and give a person the right to reside in another country for a long period of time. Determining the tax residency and nationality of the person registering the company is very important in determining the tax regime applicable to the company.
Client:
What's the difference between country and jurisdiction?
Consultant:
One country may have several jurisdictions, i.e. legal and tax regimes that apply to companies registered in them. A good example is the UK, which has jurisdictions in England and Wales, Scotland and Northern Ireland. Another example is the UAE, which has special economic zones that provide special advantages to companies operating in certain areas.
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Unit G, 6/F, Neich Tower, 128 Gloucester Road, 2630, Hong Kong
Unit G, 6/F, Neich Tower, 128 Gloucester Road, 2630, Hong Kong
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