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Opening your own company in the UK: from incorporation to running a business

PUBLISHED: 11 March 2021
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Opening a UK company is no longer the prerogative of only a few foreign entrepreneurs. If you take the process of UK company registration seriously and find your niche in the highly competitive British market, you will get not only a stable source of income but also a chance to settle in the UK and get a British passport.

It is not a walk in the park and not cheap either to establish your own business in one of the world’s financial hubs – the United Kingdom, but the money and effort you invest will pay off in the long run. You want to know why?

UK company registration: why is it a good idea?

  1. Robust British economy is unfailingly resistant to global crises and downfalls. Therefore, any viable business idea is bound to be successful.
  2. A UK-registered company is an investment in a legal business that has nothing to do with offshore schemes. It will generate more trust and respect from partners, suppliers and clients across the globe.
  3. UK government is very keen on supporting small- and medium-size companies as they are a source of income (read taxes). It can be either a direct support such as tax incentives, or indirect such as minimum interference, maximum simplification of processes and much more.
  4. Tax laws in Great Britain are not the most flexible; however, they offer many tax optimisation opportunities.
  5. We should not forget the variety of business structures for incorporation of UK companies, flexibility in terms of foreign residents who can become company directors as well as nominee shareholders and directors.

Opening your own company in the UK

The above benefits combined with centuries of entrepreneurial traditions, a unique geographical position at the crossroads of trade routes and colossal markets for the sale of goods and services, create a business environment that attracts entrepreneurs from all over the world.

  • Our article would not be complete if we only focus on the company’s performance and profitability and forget about other benefits for an investor doing business in the UK:
  • First, a chance to move to a safe European country with a family in the status of entrepreneur or investor.
  • Second, after a few years of continuously living in Great Britain, a foreign businessman can apply for settled status for themselves and their family, and then obtain a British passport.
  • Third, prestigious and high-quality education for children in the best European schools, colleges and universities.
  • Fourth, there are ideal conditions to preserve and multiply your personal savings. The money that you have earned before moving to the United Kingdom will be considered tax-free clean capital.
  • Fifth, it is up to you where you will live in the UK – in a quiet quintessential English or Scottish town or the dynamic hustle and bustle of London, one of the world’s financial hubs.

A variety of options for UK company registration

Before you start filling in an incorporation form to open a UK company, choose a business structure that best suits your needs. There are four most common types of UK companies – base your choice on your goals and benefits and risks of each structure.

Here is a table where we included the four business structures on the left and their key benefits on the right.

Business structure Advantages
Limited liability company (LTD or Limited)

Great solution for small and medium businesses

Shareholders’ liability for company’s debts is limited to their share in its share capital

Share capital can be as little as £1

A shareholder can be also a director of that company

No restrictions on nationality, residency and tax status of shareholders and directors

Public liability company (PLC)

A more prestigious legal entity

Shares can be traded on stock markets

Shareholders’ liability is limited to the amount they contributed to the company’s share capital

A PLC must have at least 2 shareholders and 2 directors one of which must be a natural person

Limited liability partnership (LLP)

No corporation tax as profit belongs to partners who must pay income tax

Partners’ liability is limited by the amount they paid on registration

No stamp duty on properties sold or purchased by an LLP

Scottish limited partnership (SLP)

No corporation tax, like LLP

Only general partners are responsible for management and liable for any debts and obligations of the partnership

SLPs are not required to file annual accounts when there is no activity in the UK

Свой бизнес в Великобритании

Your UK business stress-free

Irrespective of the company structure, you will need professional support to operate and run your business in a most efficient manner. You will need expert advice at every stage of setting up and running a business – from incorporation to first annual accounts and beyond.

We can offer you three package solutions for start-up businessmen coming to the UK to realise their entrepreneurial dream.

Standard Package

It includes a bare minimum to start a business.

Imperial & Legal team will help you prepare all paperwork to open a UK company. You will get a certificate of incorporation and articles of association once your company is set up.

We will also provide you a 1-year registered address where you will receive post from the Companies House and HMRC related to corporation tax.

If your company’s shareholding structure or any details change, a company secretary will be able to make all necessary changes in the company’s registers and duly notify the Companies House (additional fee may apply).

Standard Plus Package

Apart from the above services, Standard Plus package includes a correspondence address for general post and an English-speaking secretary who will generate daily reports and email them to you at the end of each day.

Add-on services include a landline and a meeting room (fees apply).

Imperial Package

This is a turnkey solution for a UK business including anything your company might need. Apart from what is covered by two other packages, Imperial includes:

  • A business address for VAT registration and opening a bank account.
  • Assistance with opening a bank account in a UK or European bank.
  • Consultations with Imperial & Legal UK business experts.
  • VAT registration.
  • Visa support for 2 employees.
Imperial & Legal business support is not limited to those three solutions. You can get in touch to get advice on preparing tax and financial reports, on optimising fiscal costs and accounting.

Регистрация компании в Великобритании

What are the best entrepreneur visas to the UK?

To run a business in a foreign country, you must be there at least; for that, you need a permit that would give you right to live in the UK for a few years – it is called a visa or a residence permit.

Foreign entrepreneurs can apply for three main business visas: Start-up, Innovator and Representative of an Overseas Business.

Each of the visas has its own limitations. Start-up and innovators must have a clear, future-proof business plan that will inspire one of the government-approved bodies to issue them an endorsement letter.

A sole representative visa is available to a top manager of a parent company outside the UK who is not a majority shareholder. Work experience, qualifications and relevant education are what the Home Office will be especially interested in. A good level ofEnglish is a must.

All three visa categories require from entrepreneurs to dedicate all their working time to the development of business at hand. More information about these visas can be found in this article about business visas for entrepreneurs.

If you have money and ambitions to invest millions of pounds in a UK business, it is only natural that you would ask for more freedom and flexibility in return. Fortunately, there is a visa that gives such freedom – a UK investor visa.

Benefits of Tier 1 Investor visa

UK Investor visa does not take a lot of time to get, there is no need to take a language test or have any work experience and business education.

Investors have almost no limitations as to what they can do in Great Britain – they and their family can leave the country for as long as they need and come back any time. You don’t have to work only on one project – you can work anywhere, study or enjoy your time in a developed country.

Minimum investment is £2 million and it goes up all the way to £10M and higher. You must invest in a UK-registered business or businesses, your own or otherwise. There are restrictions on activities of these businesses as the government wants foreigners to invest only in the real sector of the economy.

Depending on how much you have invested, after 2 to 5 years of living in the country, you can apply for an indefinite leave to remain, or settlement, and then obtain British citizenship. If you are not keen on doing business after getting settled status, you can sell it and have your money back.

Benefits of Tier 1 Investor visa

Want to know more about registering your company in the United Kingdom? Get in touch with business experts at Imperial & Legal. Immigration is only one aspect where we excel; we also offer a comprehensive range of services for any personal and business needs. Our specialists will not only help you set up a business in the UK and get a visa, but also ensure a smooth relocation to Great Britain (including search of accommodation and schools) and advise on tax optimisation and running a business.

FAQ

What are most common business structures for foreign entrepreneurs?

Foreign businessmen prefer one of the four incorporation structures to register their UK business:

  1. Limited liability company (Limited, Ltd).
  2. Public limited company (PLC).
  3. Limited liability partnership (LLP).
  4. Scottish liability partnership (SLP).

They have one thing in common – limited liability, when shareholders, guarantors, partners and limited partners are liable for the company’s debts only up to the amount of their contribution in a share capital, their guarantee, nominal or actual value of purchased shares.


What is a company limited by guarantee?

It is a type of a limited company used to register not-for-profit and charity organisations.

In a company limited by shares, shareholders are liable within the amount of their nominal shareholding.

In a company limited by guarantee, people liable for company’s debts are called guarantors; they are owners and their liability is limited to the amount of guarantee fixed in incorporation documents.


What is the difference between a public limited company (PLC) and a limited liability company (Ltd)?

Unlike a private limited company, a public company can trade its shares on stock exchange markets and belong 100% to individuals. Therefore, if a PLC does not succeed, shareholders will be liable for its debts only with the value of shares they paid and not nominal value like in a limited company.

Share capital of an active public company must not be less than £50,000 where at least 25% is paid. Unlike Ltd, a PLC must have at least 2 shareholders and 2 directors one of whom must be an individual over 16. Both shareholders and hired personnel can serve as company directors.


Who is liable in a partnership and who are designated partners?

Like in the companies above, a limited liability partnership is independent of its members who are liable for partnership’s debts within the amount of contribution they made on registration.

However, at least two shareholders in an LLP must become designated partners who are legally liable for incorrectly prepared or late accounts.

All SLP partners are divided into two categories:

  1. General partners who are responsible for management and liable for any debts and obligations of the partnership.
  2. Limited partners who cannot take part in running of the SLP and are only liable up to the amount they have put into the partnership.

Do I need a company secretary and why?

Most UK-registered businesses are not required to have a company secretary. However, we strongly recommend using their services especially if you do not have knowledge of UK legislation and how to deal with regulatory bodies.

London office of Imperial & Legal offers company secretary services to foreign businessmen both as part of package solutions and as an add-on. We will help you:

  • Get incorporation documents: Memorandum and Articles of Association and a Resolution to incorporate a company.
  • Appoint a new director.
  • Make changes in the shareholding structure.
  • Make changes in the details held on company founders and directors.
  • Increase or reduce share capital.
  • Amend SIC codes.
  • Obtain certificates and reports about the company and legalise them whenever necessary.

A company secretary will take care of all admin-related matters. This will give you peace of mind that the company will not be shut down in an inopportune moment because you forgot to file this statement or submit that report.

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