Opening an LLC in the United Kingdom
Starting a business in another country is a very responsible step. Awareness of legislation, proper registration, and knowledge of the tax code ensure the legality of activities, open access to various business opportunities and state support, and help avoid potential legal problems in the future.
Opening a Limited Liability Company (LLC) in the United Kingdom is an attractive option for entrepreneurs who want to protect their personal assets and take advantage of a separate legal entity. The process of registering an LLC in the UK is straightforward and, with the right approach, quite simple.
Features of an LLC (LTD) in the United Kingdom
Contracts and agreements can be concluded on behalf of the company, and the responsibility for its activities, obligations, and financial support lies with the limited liability company itself, not the individuals who founded it. The owners are liable for debts only within the limits of their personal guarantees to the company or the amount of share capital.
This is one of the most common types of businesses in the UK, and its feature is that one person can hold multiple positions (for example, owner and director).
There are two types of LLCs in the United Kingdom
- A company limited by shares. The essence of this type is that shareholders invest in the company, and their share of the company and income depends on the amount of investment.
- A company limited by guarantee. This type is usually chosen by future non-profit and charitable organizations. This type of enterprise is owned by guarantors who often reinvest their profits into the business rather than spending it on personal needs.
In both types of enterprises, the financial responsibility of shareholders and guarantors is limited to the nominal value of shares or the fixed amount of money invested in the company (the guarantee).
The enterprise must be registered with the Companies House under one of these types.
When registering, it is necessary to consider:
- Minimum age requirements. The founder must be at least 16 years old;
- Name options. At least 3 company name options must be provided, including the legal and organizational form in the name;
- The volume of submitted information. Full information about the director(s) must be provided;
- In some cases, restrictions may be imposed on the ownership of shares exclusively by UK residents;
- If intending to hire employees, it is mandatory to calculate payroll tax and National Insurance contributions from their salary to remit them to the tax and customs service;
- The LLC's share capital must be at least 1 pound sterling.
Steps in the registration process:
- Choosing a unique company name that complies with naming rules;
- Choosing a legal address, which must be located in the UK;
- Appointing directors and, optionally, a company secretary. At least one director is required, but a company secretary is not mandatory;
- Preparing documents. Necessary documents include a passport and a document confirming the applicant's address (utility bill, rental agreement, bank statement with address, etc.);
- A brief business overview. This is important and should cover the type of activity, main goals, location of the future business, contact information, and website (if available);
- Identification of shareholders and share capital;
- Drawing up the memorandum and articles of association;
- Registration. Companies can now register online or through Companies House (but the traditional method is still available). The duration of electronic registration is from 4 to 24 hours (depending on the specific set of documents). However, if you decide to submit documents in paper form, the process will take several days;
- Submitting the application. It is important to include the necessary documents that confirm the identity of directors and shareholders, as well as proof of payment of the registration fee;
- Confirmation of registration. After the application is approved, a registration certificate will be issued;
- Applying for tax registration. This is done after the enterprise is registered;
- VAT registration. Not necessary for all, but if the company has an annual turnover of £85,000 or more, VAT registration is required;
- Opening a corporate bank account.
When opening a limited liability company in the UK, consulting with a lawyer is important to ensure the correctness and completeness of all legal aspects of this process, as there are many nuances due to the variety of types of companies in the country. Lawyers working on the legal marketplace "Consultant" can help prepare and verify all necessary documents, such as the company's charter, memorandums, and registration forms. They can also provide advice on compliance with local legislative requirements, tax obligations, and licenses. With the help of a lawyer, you can avoid mistakes that could lead to delays or legal problems in the future.
