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REGISTER YOUR COMPANY NOWPrivate Limited Company incorporation checklist
If you are considering the incorporation of this type of company, you should check the following points:
1 Director, 1 Shareholder Required, No Locals
Corporate Tax Rate at 19%
Great Banking Opportunities
Legal System Based on Common Law
Network of Double Tax Treaties
No Exchange Control Restrictions
Tax Exemption on Dividends Paid Abroad
Under the Companies Act 2006, the UK Private Limited company limited by shares, is an independent legal personality and has unlimited powers to engage in any business. The company is a separate legal personality from its owners, this means that the liability of the owners is limited to the nominal value of their shares and any personal guarantees they provided. The company model is ideal for individuals who want to protect their assets from business liabilities arising from debt or potential lawsuits.
1 Director, 2 Shareholder Required, No Locals
Great Banking Opportunities
Legal System Based on Common Law
Network of Double Tax Treaties
No Exchange Control Restrictions
Under the UK Limited Partnership Act, the UK LLP is an independent legal personality and has the same capacity to engage in any lawful business and may be managed by a mandatory agreement, which is not a mandatory document. While the shareholders’ liability, or members as they are called, is limited to the amount of capital paid to the company for their share participation, the LLP Company is considered as a pass-through entity in terms of taxation. This means that members are subject to personal income tax in the jurisdiction where income is generated, on the LLP Companies, profits equivalent to their share participation in the company, regardless if the profits were distributed to members or not. Notably, there are specific countries which do not acknowledge the tax transparency of the LLP Company and if a company is considered to have its tax residency in one of those countries, it will be under the corporate income tax of that jurisdiction.
Corporate Tax Rate at 19%
Great Banking Opportunities
Legal System Based on Common Law
Network of Double Tax Treaties
No Requirement for the Members to be Locals
Potential for the Attraction of the Investments
Under the UK Companies Act of 2006, the UK Public Limited Company is an independent legal entity and has the same capacity to engage in any business provided that the activity is allowed by its memorandum and articles of association. The Laws of United Kingdom state that they do not require a license such as bank, insurance, assurance, collective investment schemes etc.
If you are considering the incorporation of this type of company, you should check the following points:
The name of the company must be determined, it must not contain offensive or sensitive words. It must not contain banned characters, signs, symbols and punctuation. There is also a prohibition for words implying any connection with the UK government or local authorities or connection of any other country. The company’s name must not be very similar to existing names in the Companies House (registrar) or an existing trade mark. It must end with “Limited” or “LTD”.
A Private Limited Company is required to have a registered office address in the United Kingdom, that must be a physical address located within the United Kingdom.
One director is the minimum required and there is no requirement for them to be locals. Corporate entities can be appointed as directors, but it is required that each company has at least one natural person as its director. The director and shareholder can be the same person. The directors details are registered on the public record and can be accessed by the public.
One shareholder is the minimum required, there is no requirement for them to be locals and corporate entities can be appointed as shareholders. The director and shareholder can be the same person. The shareholders details are registered on the public record and can be accessed by the public.
The beneficial owners details are not registered on the public record and cannot be accessed by the public, however since 2016 a new requirement was initiated in the UK to maintain a record of persons who have significant control in the company and file this information to the Companies House, which will be accessed by the public.
The owners of a UK Private Limited company are free to determine any amount as the authorised capital at incorporation and it can be de-nominated in any currency, although the British Pound is the one usually used. The authorised share capital is the maximum amount of capital that the company is authorised by its constitutional documents to draw from its shareholders to issue in exchange of shares.
Only registered shares are admissible and the minimum number of shares that must be issued is one. A UK Private Limited company may not issue bearer shares.
No requirement is imposed on minimum paid up capital at incorporation, this means that the owners of a Private Limited company are not required to set a deadline as to when such capital must be paid up by the shareholders.
A UK Private Limited company is incorporated within 1 to 2 working days.
There are available ready-made Private Limited companies in the United Kingdom.
There are no economic substance requirements in place in the United Kingdom for Private Limited Companies.
The Company must keep and maintain accurate accounting records for six years and is required to file annual returns in specific form every year. Also, the HM Revenue & Customs is notified for every company that is registered with the Companies House and the company receives a Unique Tax Payer reference number which is sent to its registered office and is used for the reporting to the Department. The company must file tax returns annually. If the company’s annual turnover is higher than £10.2 million, its assets’ value is higher than £5.1 million and employees more than 50 persons; the company is required to file audited accounts.
Corporation tax rate in the United Kingdom is 19%, which is relatively low in comparison with other developed countries. There is a tax exemption on dividend income paid to shareholders or parent companies, UK residents and non-residents alike. Furthermore, non-resident individuals and organisations enjoy an exemption from capital gains tax on profits deriving from transactions of holding companies shares.
United Kingdom has the largest participation record in Double Tax Treaties which offers significant benefits to companies registered there. The tax rate imposed on dividends paid to a UK parent company owning 10% or more of the issued share capital of a foreign subsidiary, is reduced by 5% whereas the subsidiary is located Double Tax Treaty country. Another advantage deriving from the UK’s participation in Double Tax Treaties is the tax exemption on foreign income dividends. Specifically, small companies whose turnover and balance sheet total does not exceed €10.000.000, are exempted from paying tax on foreign income dividends if these are coming from a Double Tax Treaty country. Larger companies enjoy total exemption on foreign income too for specific types of dividends.
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If you are considering the incorporation of this type of partnership, you should check the following points:
The name of the partnership must not contain offensive or sensitive words. It must not contain banned characters, signs, symbols and punctuation. There is also a prohibition for words implying any connection with the UK government or local authorities or connection of any other country. The company’s name must not be very similar to existing names in the Companies House (registrar) or an existing trade mark. It must end with “Limited Liability Partnership” or “LLP”.
A UK LLP is required to have a registered office address in the United Kingdom, that must be a physical address located within the United Kingdom.
In UK LLPs directors are called managers, one manager is the minimum required. Corporate entities can be appointed as managers. The directors details may be registered on the public record and can be accessed by the public.
In UK LLPs shareholders are called members, two members are the minimum required. There is no requirement for them to be locals and corporate entities can be appointed as members. The managers and members can be the same person. The members details are registered on the public record and can be accessed by the public. It is mandatory to determine two members which shall undertake the responsibility to comply with statutory filing obligations and relevant issues.
The beneficial owners details are not registered on the public record and can not be accessed by the public.
The members of an LLP Company are free to determine any amount as their capital contribution to the partnership and it can be denominated in any currency. The capital contribution is the maximum amount of capital that the LLP Company is authorised by its constitutional documents to draw from its members in exchange membership interest. It is permitted by Law to have multiple classes of membership interests.
No requirement is imposed on minimum paid up capital at incorporation, this means that the LLP Company members are not required to set a deadline as to when such capital must be paid up.
A UK Limited Liability Partnership is incorporated within 1 to 2 working days.
There are available ready-made LLPs in the United Kingdom.
There are no economic substance requirements in place in the United Kingdom for Limited Liability Partnerships.
The LLP Company must keep and maintain accurate accounting records for six years and is required to file annual returns in specific form every year. Also, the HM Revenue & Customs is notified for every LLP Company that is registered with the Companies House and the LLP Company receives a Unique Tax Payer reference number which is sent to its registered office and is used for the reporting to the Department. The LLP Company must file tax returns annually. If the company’s annual turnover is higher than £10.2 million, its assets’ value is higher than £5.1 million and employees more than 50 persons; the company is required to file audited accounts.
The members of LLP Company are also required to obtain self-assessment tax code and file a self-assessment tax return regarding the funds received from the LL because the LLP Company is considered as a pass-through entity in terms of taxation. However, members who are tax-resident in other jurisdictions and are not receiving income from US source, are exempted given that they are subject to taxation in the jurisdiction where they are tax residents.
The LLP Company is considered as a pass-through entity in terms of taxation, thus it is not subject to corporate tax income. However, the LLP Company members are subject to personal income tax in the jurisdiction where they are tax resident, the payable tax is based on the LLP Company profits equivalent to the member’s share participation, regardless if the profits were distributed to them or not. Members who are tax residents in other jurisdictions and do not own real estate or employ person within the UK are not subject to personal taxation in the UK for the LLP Company income deriving from a foreign source.
Notably though, there are specific countries which do not acknowledge the tax transparency of the LLP Company, and if a company is considered to have its tax residency in one of those countries, it will be under the corporate income tax of these jurisdictions.
If you are considering the incorporation of a United Kingdom PLC, you should take into consideration the following points:
It must not contain sensitive words which are prohibited by legislation. The following words are prohibited: “Building Society”, “Chamber of Commerce”, “Chartered”, “Cooperative”, “Imperial”, “Municipal”, “Royal”, “Assurance”, “Bank”, “Insurance”, “Trust” and any other words implying connection with university or professional association or activity prohibited by the Law. There is also a prohibition for words implying patronage of the Queen or a member of the Royal Family, patronage or any connection with the UK government or department or any other country. For utilization of the words: “Holdings”, “International” and “Group” special authorization procedure is applied.
A United Kingdom Public Limited Company must have the registered address within the territory of the United Kingdom.
Two directors are the minimum required. There is no requirement for them to be locals and there is no requirement regarding the place and frequency of board meetings.
Corporate entities can be appointed as directors. The director and shareholder can be the same person. The directors details are registered on the public record and hence, publicly accessible.
The appointment of a secretary is mandatory. It can be the director of the company.
Public Limited Company must have a minimum of 1 member. It may be both natural or corporate entity without the requirement to be a local. The shareholders meetings can be conducted in any place within the frequency of 6 months. It should be held the next day after the accounting reference date. The combination of the director and shareholder being the same person is possible. The personal details of the members are publicly accessible.
The personal details of the beneficial owners are the subject of public registration, thus, are publicly accessible.
The owners of a PLC company are free to determine any amount as the authorized capital at incorporation; it should not be less than 50,000 British Pounds (GBP). It can be de-nominated in British Pounds only. The authorised capital is the maximum amount of capital that the company is authorised by its constitutional documents to draw from its shareholders in exchange of shares issued.
A United Kingdom PLC may have registered shares, with or without voting rights, preferential or common and must be issued in a British Pound. Bearer shares are not permitted.
Paid up minimum paid up capital that should be paid before any transaction of the company takes place is 25% from the authorised capital. Thus, a minimum amount of 12, 500 GBP should be initially paid.
A Public Limited Company in the United Kingdom can be incorporated within two to three days.
Ready-made but unused Public Limited Companies are not available in the United Kingdom.
The legislation in the UK does not contain any requirements regarding the economic substance of the PLC. This means that the company is not required to have premises,an adequate number of employees and the number of expenditures to support its activity in United Kingdom. A UK PLC must only have an office address in the territory of United Kingdom.
The United Kingdom PLC must prepare and fill accounting records that are also subject to audit. The annual revenue of the UK PLC must be delivered to the Companies House of the United Kingdom every 12 months.
A United Kingdom PLC is subject to the corporate tax that constitutes 19% of the worldwide income of the company. However, the United Kingdom has more than 100 double tax avoidance agreements and during the payment of the dividends, interests or royalties the PLC Company is entitled to benefit from those treaties.
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