Advantages of Registering a Company in the UK

Registering a company in Great Britain is a smart move for taking your business into one of the wealthiest markets around. The UK government fosters strong business and financial ties with other countries. Its economy operates independently from EU decisions, and the currency remains stable. This path is beneficial for any business as it opens doors to a well-structured infrastructure, quality financial services, and properly applied regulations. You gain access to global markets and international trade opportunities since the UK is a member of many international organizations. The country is known for its flexible laws and transparent legal system, providing a stable environment for businesses. Plus, registering a company in the UK involves a straightforward process. Britain ranks 6th among the most developed countries by GDP. Contributions to the financial system are consistently increasing. For instance, in 2022, it grew by 10% compared to 2021.

Why You Should Register a Company in the UK

1. Global Business Hub: The UK is a business center with access to international markets.
2. Stability and Transparency: The country’s economy is stable, and its legal system is transparent. This attracts investors and is advantageous for companies.
3. Limited Liability: By opening a Limited (LTD) company, owners enjoy limited liability for the company’s debts, protecting their assets.
4. Convenient Tax System: The corporate tax rate is reasonable at 19%, along with a straightforward system for taxing dividends.
5. Easy Registration: The entire process can be done online.
6. Flexible Business Structures: You can choose from different business structures (like LTD, LLP, etc.) to suit your specific needs.
7. Impeccable International Reputation: The UK is a center for business and finance, which can enhance your company’s status globally.
8. Access to Finance: There are plenty of investment sources, banks, funds, and venture capital opportunities in the UK.

Legal Structures for Companies in the UK

Registering a firm in Great Britain means launching your business in one of the following forms:

1. LLP (Limited Liability Partnership): A partnership business where all managers have limited liability for their shares. You need at least two partners to start.
2. LC (Limited Company): The owner can be both the founder and the manager of the business.
3. LTD (Limited): A limited liability business for private entrepreneurs. Offshore Pro Group can assist you with registering an Ltd company in Great Britain from the comfort of your home.
4. Branch: A branch of a foreign company. This type of business is separate from the parent company and has reporting and tax obligations.
5. PLC (Public Limited Company): A company with at least two directors and two shareholders, with a capital of £50,000. This type of company finds it easier to trade shares on the stock exchange.
6. ST (Sole Trader): This is similar to self-employment and is a straightforward way to start a business in the UK. However, the owner is financially liable for the business’s debts.

Let’s look at the features and limitations of these popular business forms in the UK.

Limited Company

An LC is a legal entity separate from its shareholders. Owners have limited liability, meaning their assets are at low risk. A Limited Company can issue shares to raise capital. Limitations:

1. Obligations for reporting and paying taxes.
2. More serious responsibilities compared to other forms.

Limited Liability Partnership

Owners have limited liability for the company’s debts. Each partner is accountable for their shares. There’s no share division, but partners can have profit shares. Limitations:

1. Partners must sign a partnership agreement.
2. Partners are required to provide company information upon request by regulatory bodies.

Limited Liability Company

Owners enjoy limited liability for the company’s debts. Shareholders can sell their shares. They must submit reports and pay taxes. Limitations:

1. The company cannot issue bonds.
2. It cannot trade on the stock exchange.
3. Registration with Companies House is required.

Sole Trader

This is the simplest form of ownership and management. The owner is responsible for the company’s debts. The tax system is straightforward. Limitations:

1. Limited funding sources.
2. Restricted expansion opportunities.

Public Limited Company

Shares are publicly traded on the stock exchange. There are high transparency and reporting requirements, along with access to funding sources. Limitations:

1. High degree of regulation and obligations.
2. Limited control for owners due to public scrutiny.

Branch

This is an additional division of a foreign company. It can use the parent company’s name and is fully subject to UK laws. Limitations: No independence—operates “under the authority” of the parent company.

Procedure for Registering a Company in the UK

Before opening a company in the UK, you need to prepare the following documents:

• A copy of your passport.
• Information about the shares owned by all shareholders.
• The chosen form of the business.
• At least three potential business names.

The process for opening a company in the UK includes:

1. Consultation with a Specialist: Consult with a professional. Discuss details, requirements, choose a legal structure, review management, and other business specifics.
2. Preparing Necessary Documents: Gather and properly prepare applications, certificates, forms, articles, and the company memorandum according to UK requirements.
3. Choosing a Company Name: Check and reserve a unique name. It should not infringe on any rights, be morally appropriate, and must start or end with “Ltd” or “Limited.”
4. Registration with Companies House: Submit the documents to Companies House (the regulator). The regulator will review the application and provide a positive or negative response.
5. Obtaining a Certificate: If the response is positive, the regulator issues a certificate with the company’s registration number.

Opening a firm in Great Britain typically takes up to 7 days, and obtaining a tax number takes a maximum of 10 working days.

Financial Reporting for Businesses in the UK

Businesses must submit tax returns no later than one year after the tax period ends. All tax residents in the firm are responsible for calculating and paying taxes. Tax authorities monitor compliance and impose penalties for violations. Annual Accounts (financial turnover reports) must be submitted to the regulatory authority once every 12 months, either in paper form or electronically. The first report after launching the business is due within 21 months from the end of the reporting period and must include all transactions from the start of the company’s operations. After that, financial reports are submitted annually within 9 months after the end of the reporting period. All companies, regardless of their legal form, must submit reports. Late submissions will result in penalties. For businesses that do not engage in financial activities, simplified reporting forms are available. All in all, Great Britain offers a friendly business environment to foreign entrepreneurs. The tax burden in the UK is smaller in comparison to many Western European countries so establishing a company in Great Britain is an attractive opportunity indeed.