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Company incorporation in the United Kingdom and England |
The Principal Corporate Legislation is Companies Act 1985 (amended), and the Income and Corporation Taxes Act 1988. English is the language of legislation
and corporate documents. |
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The types of company used for international trade and investment are Private
or Public Limited Companies. A company incorporated in the United Kingdom has
the same powers as a natural person. There are no specific laws relating to the
unauthorised disclosure of information about a UK company, its directors or
owners, but UK law recognises the common law duty that professionals have
towards their clients to keep their affairs confidential. |
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This notes sets out the requirements for the
incorporation of private limited companies, public limited companies and
un-limited companies. The note refers to the major differences between types of
company, the documents required for their formation, shareholders, capital and officers and secretary. It does not look in detail at the question of company names. Certain words under English law suggest a particular thing and some names
are proscribed from use unless the company is involved in a particular activity. |
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There are restrictions on trading and business activities: specified types of
service, including for example banking, insurance, financial services, consumer credit-related services and employment agencies, are not permitted. |
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Incorporation procedure requires the submission of the Memorandum and Articles of Association, Declaration of Compliance and Statement by the First Directors and Secretary, notification of the location of the Registered Office
and payment of the requisite fee to Companies House. A registered office must be
maintained in the United Kingdom. For the purposes of this information sheet a
UK company is incorporated in England or Wales and registered in Cardiff, Wales.
Details on incorporating a company in Edinburgh, Scotland or Belfast, Northern
Ireland are available on request. Off-the-shelf companies are available. |
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London Registration: Many international clients and UK businesses prefer to
have their UK company incorporated in London. The UK Registrar of Companies
levies a nominal additional fee for this service, and clients often take
advantage of this exclusive facility. However, less than 1% of all companies
incorporated in England and Wales are today incorporated in London. Over a
decade ago the government moved the principal Companies’ Registry for England
and Wales from London to Cardiff in Wales. |
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Another distinct advantage of incorporation in London is the availability of
a same-day incorporation service. |
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Clients who decide not to incorporate in London will have their company
registered at the principal Companies Registry for England and Wales in Cardiff. |
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In addition to the Cardiff Registry, which covers England and Wales, there
are also company registries in Edinburgh for Scotland and Belfast for Northern
Ireland. |
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Company names are subject to the following requirements and restrictions:
Although the name of company can be in any language, documentation must be
in English. Any name in a language other than English must be accompanied by a
translation to ensure that the name is not restricted. However, if the company is incorporated in Wales there is a proviso that documentation in Welsh will
be accepted.
Any name that is identical or similar to that of an existing company is
not acceptable.
Any name considered to be offensive or suggesting criminal activity is not
acceptable.
Any name that suggests the patronage of the Royal Family or the Government
of the United Kingdom is not acceptable.
Restricted names include Assurance, Bank, Benevolent, Building
Company, Chamber of Commerce, Fund Management, Insurance, Investment Fund, Loans,
Municipal, Reassurance, Reinsurance, Savings, Trust, Trustees, University
or their foreign language equivalents.
Any company name implying financial service activities such as banking and
insurance require consent or licence.
Limited (Ltd) or Public Limited Company (PLC) are the required suffixes to denote limited liability.
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A Private Company must have at least one director, and a Public
Company must have a minimum of two directors. A sole director cannot also be
company secretary. The directors can be natural persons or bodies corporate.
They may be of any nationality and need not reside in the UK. If there is more
than one director, one of them can also be company secretary, but as UK Company
Law is complex, it is recommended that a professional secretary with relevant
experience be appointed. Details of the directors appear on the public file, but
anonymity can be maintained by the use of third party professionals. |
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A company secretary must be appointed. The company secretary may be a natural
person or a body corporate. They can be of any nationality and need not reside
in the United Kingdom. |
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For Private Companies the minimum number of shareholders is one, for
Public Companies the minimum number is two. A shareholder may be a
corporate body or an individual. Details of shareholders appear on public record but anonymity may be retained by the use of nominee shareholders or holding companies. |
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New Companies |
Under United Kingdom law there are four types of
company that can be registered.
Private companies limited by shares – the liability of any share holder cannot be more than the amount that is
unpaid on shares held by them. When shares are issued, there are a certain
number of shares in any company. There is a particular face value on each
share and, say 100 shares comprise the share capital of the company. Two
may be issued and fully paid up and a balance of 98, namely £98 is the
extent of the liability in relation to the company.
Private Company Limited by Guarantee – the liability of any members/shareholders is limited to the amount that they
have agreed to contribute to the company's assets if it is wound up. This
type of company is generally only used for charitable work and cannot be
used as a company trading for profit.
Private Unlimited Company – this is a private
company with no limit as to members liability.
Public Limited Company (plc) – the shares in a
plc may be offered for sale to the general public but the liability of
shareholders as with private limited companies cannot exceed the amount
unpaid on shares held by them.
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Requirements relating to authorised and issued share capital depend on the type of Company:
Private Company: the minimum issued capital is one share, but
further capital is usually issued to reflect the stability and strength of the
company. A private company is normally incorporated with an authorised share
capital of £1,000.
Public Company: the minimum authorized share capital for a public
company is £50,000, of which £12,500 must be paid up (in case of liquidation
the full £50,000 must be paid). The minimum issued capital is two shares.
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The following classes of shares are permitted: ordinary shares, preference
shares, deferred shares, and redeemable shares and shares with or without voting
rights. Bearer shares are not permitted. |
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Annual Taxation and Fees |
Tax is paid by companies in the UK based on audited accounts submitted to the
Inland Revenue at the end of the company’s financial year. International tax
planners are able to utilise UK structures to minimise taxation for
international business. The United Kingdom is party to more double tax
agreements than any other sovereign state. The UK has signed double taxation
agreements with 100 countries and thus enjoys the most extensive double taxation
agreement network in the world. There are no licence fees. |
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It is important to emphasise that corporation tax rates are the lowest in the European Union. Tax is levied at 20% on a UK company that has net profits under
£300,000, and a tax rate of 30% is levied where the profits are over this
figure. |
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Requirements for Financial
Statements are as follows:
All UK Companies must file accounts with the Registrar of Companies.
Generally a Company must appoint an auditor, and audited accounts must be filed
with the Companies Registry. In a large number of cases companies with sales of
under £90,000 are exempt from this requirement and those with turnover of less
than £350,000 need only produce abbreviated accounts with a special accountant’s
report.
Registration
of a UK company (private and public limited) can take up to 5
working days. Our standard package will
include a Company Secretary, Registered Office Address, Certificate of Incorporation and Memorandum and Articles of Association.
Fast Track registration providing the standard services above within 24 hrs.
Limited Liability Partnership. The LLP can
provide the organisation and flexibility of a partnership to what is in effect
a legal business entity with limited liability.
Original documentation will be sent to the client or
they may be retained at the company secretary's office. An Apostil of
documents stamped by the Foreign and Commonwealth Office may also be provided
at extra cost.
DHL to the client.
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