Company in UK
The UK is one of the most important markets of the world. It is a market of approximately 62 Million people and is considered by some to be a good entry point into the European market. The UK is a multicultural market with a strong economic and financial framework that is ideal for any business. Forbes ranked the UK as 8th in the world for “ease of doing business” which considers various factors that help boost businesses in the economy. A favorable tax environment greatly benefits entrepreneurs and could be a wonderful option to take the next step in your business.
Types of Companies in the UK.
The word company in the UK represents a limited company. This means there are primarily two types of companies –
- Private Limited Companies - Pvt.
- Public Limited Companies - Plc.
Note: Investors benefit from this because they are liable only for the amount they have invested.
How to Register a Company
Forming a company in the UK is very easy and requires minimum effort. There are options you can choose based on the convenience you seek. For example, it is possible for us to speak to the company formation agent in the UK to streamline this entire process for you. Company incorporation documents can then be forwarded to you electronically and the process is typically very quick. This would allow you to save precious time and resources of otherwise engaging with an agent in the UK.
Our inhouse legal department can also provide all the legal support the formation requires.
As a basic guide the steps taken to establish a company in the UK can be states as follows,
- Company registration and acquiring the Certificate of incorporation is the beginning of the entire process. This certificate legally establishes the company’s identity much like a birth certificate.
- After registration it is typical to establish a memorandum for the company where shareholders can voice necessary resolutions in it for the future.
- The UK company’s act mandates that a private company must have one director (minimum) and he/she is should be responsible to ensure ethical conduct of the company. The director is also responsible for filing the accounts as well as tax returns of the company as per the financial calendar. In case the company is a plc, or a public limited company governance law requires at least two independent directors. They will have their names on the company register (mandatory) alongside the name of the secretary and shareholders.
- Appointing a company secretary is optional for private companies however it is mandatory for a public company to have a company secretary.
- A private company does not have any regulation when it comes to its share capital. However, if your company is a public limited typically a company is required to have a minimum of 50,000£ as share capital of which 25% is upfront.
- Every company must have and maintain a registered office in the UK which would primarily serve as point of contact for the Companies House and HM revenue and Customs regulatory bodies.
- Registration for VAT is compulsory if their taxable turnover is greater than 85,000£ (March 2020). Business with a turnover of below this value need not worry about VAT. Alongside a low corporate tax (around 19%) makes UK a very attractive for companies to set up a profitable business.
Managing your company
The UK mandates some level of correspondence with the Companies House, the regulatory body for all companies that are incorporated in the UK. The public can access documents filed at the companies’ house as well as be accessed online.
A yearly filing of all company accounts and a regular audit is required by law for both private and public limited companies. These are also used by the HM revenue and Customs - HMRC, the tax regulator in the UK. Annually companies are expected to present a conformation of statement to ensure governance, i.e. the responsibilities of the director and governing of the company are addressed.
Regular VAT returns are filed by companies to ensure financial transparency. Alongside this, companies are expected to file for PAYE and NI returns that is the basis of income tax for all its employees. The law also mandates P11D forms for any reimbursement to directors to ensure transparency.
How much does it cost to set up?
The average cost of incorporating a company in the UK can range from anywhere between 10 to 50£ depending on the type and size of the business. Corporate governance rules apply differently to different types of organizations and thus there could a variable cost depending on the number of directors and shareholder structure in your company. Handling fees or professional fees vary again depending on the complexity of the task. We at HBF limited pride in consolidating all these services under one roof and allowing the entrepreneur to focus on what matters: Their Dreams. Allow us to take your venture to the next level.
HBF Direct Limited at a glance